Biden Admin Economy Ellen Brown Politics

Ellen Brown: The Case for a Central Bank Digital Currency

A question now on many economists’ minds is whether the United States should have its own CBDC. A compelling case for it is made by Prof. Saule Omarova, President Biden’s nominee for Comptroller of the Currency.
Federal Reserve chief Jerome Powell
Federal Reserve Chairman Jerome Powell. (Federalreserve / Flickr)

By Ellen Brown

Whether the U.S. should have its own central bank digital currency (CBDC) is hotly debated. Several countries, including China, already have CBDCs in operation; but the U.S. Federal Reserve is proceeding with caution. Prof. Saule Omarova, President Biden’s nominee for Comptroller of the Currency, is in favor of a CBDC and has made a strong case for it; but many conservative commentators are opposed, and her nomination remains in doubt.

Omarova sees the CBDC as an extension of public banking, but even some public banking advocates are concerned about that development. One such advocate is British Prof. Richard Werner, who laid out his cautions five years ago in a paper presented at the 14th Rhodes Forum in Greece . Werner  argued that central banks are in the process of consolidating their powers. Having achieved total independence from government and total lack of accountability to the people, they now want to eliminate competition in the form of both paper money and bank-created credit-money and control the issuance of money completely. To do this, he said, they are driving both cash and bank credit out of business by imposing negative interest rates, which have already been tested in some European countries. Werner argued that negative interest rates were designed not to stimulate the economy but to create deflation and wreak further havoc — “havoc that they intend to instrumentalise to accelerate their goal of becoming the complete masters of our lives, by allowing only digital currency that they issue and control – and that they can monitor in terms of all transactions, and that they can switch off, if, for instance, some pesky dissident criticizes them too much.”

In 2016, that may have sounded radically conspiratorial. But as libertarian commentator George Gammon observed in a podcast episode this past summer called the “The Future of America: Social Scores, CBDC, Health Passports,” the technology is now in place to take us to that very dystopian future.  Federal governments already have the tools and legal framework to see everyone’s transactions and to order bank accounts closed. But a CBDC could facilitate the process, as Agustin Carstens, a member of the Financial Stability Board in Basel, observed at an annual meeting of the International Monetary Fund in October of last year. Carstens said that CBDC, unlike cash, gives the central bank absolute control over the rules and regulations respecting its use and the technology to enforce those rules.

Cause for Caution or Haste?

Those are serious concerns, but while the U.S. delays, George Gammon argues in another podcast that China could overtake the U.S. dollar as global reserve currency by issuing a “DigiYuan” through the Public Bank of China. It could then require its commercial partners in the vast Belt and Road Initiative to open accounts at the PBOC and take payment in that digital currency. In a third podcast, Gammon discusses another challenger to the dollar, the digital SDR (short for “Special Drawing Rights”, the currency issued by the International Monetary Fund). The digital SDR is preferred by the World Economic Forum as global reserve currency.

But Fed Chair Jerome Powell does not appear to be concerned. During a virtual panel at the Bank for International Settlements (BIS) Innovation Summit in March, he said, “Because we are the world’s principal reserve currency, we do not need to rush this project, and we don’t need to be the first to market.” More important, said Powell, is to get it right. At the October, 2020 IMF meeting at which Carstens spoke, Powell also said there were difficult policy and operational questions yet to be resolved, including protecting the currency against cyber attacks, counterfeiting and fraud; determining how it would affect monetary policy and financial stability; and preventing illicit activity while protecting user privacy and security.

Financial blogger Tom Luongo thinks the Fed has broken away from the Europe-centered central banking cartel and is actually our bulwark against it. Luongo points to Jerome Powell’s clash with Christine Lagarde in May over her insistence that central banks require private banks to monitor the business of their clients, and to the Fed’s raising its repo rate to 0.25% in June. Though an apparently insignificant percentage, 0.25% was enough to attract large investors hobbled with zero rates in Europe away from the euro and into the U.S. dollar.

Also noteworthy is that Powell is treading carefully in the CBDC space, acknowledging the need to protect user privacy and security. The Fed Chair said at that IMF meeting, “The real threshold question, for us, is does the public want or need a new digital form of central bank money to complement what is already a highly efficient, reliable and innovative payments system?”

Democratizing Money

Those questions were addressed by Prof. Omarova in an October white paper titled “The People’s Ledger: How to Democratize Money and Finance the Economy,” which does an excellent job of laying out the issues. She has been criticized for saying that the system she was proposing would “end banking as we know it,” but she clarified in that paper that she did not mean that private banks would disappear. They would just revert to being what they profess to be: intermediaries between depositors and borrowers. As the Bank of England has confirmed, today banks are not merely intermediaries. They actually create the money they lend as deposits on their books. In fact most of the circulating money supply is created in that way.

In Omarova’s model, the pooled deposits would be held at the Fed and would be borrowed by “qualifying lending institutions” (chiefly banks) from the Fed’s discount window at preferential rates. This idea is not so radical as it sounds. Banks have traditionally met their liquidity needs by borrowing deposits (“reserves”) from each other through the federal funds market. But that mechanism broke down in the 2008-09 credit crisis, because banks no longer trusted each other to be good for the loans.

Pooling deposits at the Fed, wrote Omarova, would eliminate the threat of bank runs (since the Fed’s deep pocket cannot run dry) and the threat of “bail-ins” (confiscation of private funds to recapitalize failed “too big to fail” banks, a requirement of the 2010 Dodd-Frank Act). It would also eliminate the need for massive bank regulation and “stress tests” to ensure adequate capital and liquidity, and the need for FDIC insurance, “ending the intractable TBTF problem.” It would stem the troubling wave of bank consolidations in order to acquire deposits; stem speculative trading by banks and hedge funds in financial instruments; shrink the derivatives casino to a small private market; and end the need for the Fed to engage in massive repo operations. The reasons are complicated, but Omarova explains them at length in her paper.

Private lending institutions could still take investor funds and make loans, but they would be “narrow banks” or “mutual funds,” limited to lending only the money they actually had. They could not create money on their books but would be “mere intermediaries” as they purport to be now.

Free FedAccounts for all would solve other pressing problems: they would service the unbanked and underbanked, would pay interest on deposits, and would avoid the sort of widespread failure to get timely relief payments to recipients seen in the 2020 crisis. For servicing depositors, says Omarova, community banking institutions (CBIs) could be licensed to assist.

Postal banks or local public banks (if we had them) would be other good alternatives. During the Great Depression of the 1930s, federal postal banking was a very popular public option, and there is renewed interest today in restoring that system. 

The People’s Ledger

As interesting as the deposit (liability) side of the Fed’s ledger is, what could be done on the asset (or loan) side. Omarova calls it “The People’s Ledger.” Her white paper begins:

In 1896, William Jennings Bryan delivered his historic “Cross of Gold” speech, making a passionate plea for a monetary system that served the interests of the working people and increased the nation’s prosperity. Today, the precise contours of that political ideal are once again intensely contested. After decades of rising inequality, systemic instability, and relentless concentration of economic power, ordinary Americans are demanding a greater say in the distribution and use of financial resources. The Reddit-fueled GameStop rally, the dramatic rise of Bitcoin and other cryptocurrencies, the “universal basic income” and “public banking” movements—these are all discrete manifestations of the broader quest for more equitable and inclusive modes of finance.

Ultimately, however, it takes a system to beat a system.

This Article takes up the challenge of “beating” the currently dysfunctional U.S. financial system by reimagining its fundamental structure and redesigning its operation. It offers both a conceptual framework for analyzing the core structural dynamics of today’s finance, and a blueprint for reform that would radically democratize access to money and control over financial flows in the nation’s economy. [Citations omitted.]

Today, private banks rather than publicly accountable financial institutions are the chief creators of a national currency backed by “the full faith and credit of the United States.” The banks and their prime customers get the advantage of the “Cantillon effect”: those closest to the source of new money benefit first and most handsomely. They get the money cheaply and have control over where it goes. They can leverage it and speculate with it, pocketing the “seigniorage” as their own private profit; and they have no public mandate to invest it in a way that serves the people. Newly created money goes into speculative ventures, driving up demand without increasing supply, resulting in bubbles and busts, inflating consumer prices and widening the “wealth gap.”

A “People’s Ledger,” says Omarova, can limit the loans created with our deposits to truly productive endeavors. Under her proposal, “the Fed’s principal asset holdings would fall into three categories: (1) redesigned ‘discount window’ loans to qualifying lenders; (2) securities issued by existing and newly created public instrumentalities for purposes of financing large-scale public infrastructure projects; and (3) an expanded portfolio of trading assets maintained for purposes of financial-market stabilization.” Banks could still finance “non-qualifying” loans, but it would be “by issuing corporate debt and equity securities in capital markets, much in the same way as other corporations do.”

She clarifies that the Fed would not be making direct investment decisions, easing the current pressure on it to use its balance sheet for political purposes. Individual and business loans would be made by “qualifying lending institutions” drawing their liquidity from the Fed’s discount window. Loans characterized as “national development” would be made by an independent public institution she calls the National Investment Authority, “envisioned as the modern-day equivalent of the Reconstruction Finance Corporation (‘RFC’), the New Deal-era public institution that successfully led a massive nationwide capital mobilization campaign to aid Depression-struck sectors of the American economy.” That role could also be filled by the National Infrastructure Bank currently proposed in HR 3339, which is also modeled on the RFC.

Freeing the “Free” Market

What of Prof. Werner’s concerns about the centralization of power under a central banking system? His proposed solution is to reverse that agenda and decentralize power, by abandoning the big banks and supporting local not-for-profit community banks. This could also be done with decentralized cryptocurrencies. But it will be hard for either approach to gain the consumer and commercial confidence commanded by the U.S. dollar.

Omarova writes:

In part, depositors’ privacy concerns should be alleviated by (1) the continuing availability of physical cash, and (2) the CBI option for deposit services.A more complete solution, though, would likely require technology enabling sufficiently anonymous digital-dollar payments, subject to amount limitations and other conditions necessary to prevent criminal transactions. [Emphasis added.]

If Chairman Powell is indeed bucking the “globalists,” as Luongo contends, the Fed is likely to need its own CBDC to compete with the PBOC’s digital yuan and retain the U.S. dollar’s status in global markets. There are clearly reasons for concern, but if a program can be designed that protects against the risks perceived by its critics, a CBDC could be a powerful tool for “democratizing” money and credit; and Omarova’s academic paper lays out how this could be done. She argues that removing private banks from their privileged position as money creators and returning them to their traditional role as specialized intermediaries would return markets to their original state of “freedom.”

126 comments

  1. DANGER. A DIGITAL CENTRAL BANK CURRENCY IS YOUR SLAVERY MADE PERMANENT. When money is all digital they will be able to turn you off like a light switch. You will not be able to buy or purchase anything without the government’s knowledge and permission.

    This is simple if terrible stuff here….it’s not all that complicated and the truly terrible consequences are easily predicted, but the populace seems so dead…so numb…so ignorant, lazy and brainwashed that this simple and imminent danger seems to be lost on all but a few.

    It is breath taking to behold. Wake up before it’s too late.

    1. Yes I know and agree, it could be quite risky. But our money is already virtually all digital, and Omarova recommends keeping cash as legal tender and requiring banking institutions to make it readily available. The government can turn your bank account off now, and it has happened in some instances and countries. Most countries are creating CBDCs, and the US no doubt will too; so the exercise here (and that Ovaroma undertook with her academic paper) was to design one that works for the people and not against them. It does solve quite a few problems, including removing the power to create our currency from Wall Street and returning it to the people — assuming the people control the central bank and Congress, a questionable assumption indeed! That’s what needs to get worked out — how to set up a digital system that is corruption-proof. Blockchain? Maybe, but even it can be built with backdoors. If the US doesn’t create its own CBDC, the Chinese could step in and take over with its digital yuan as global reserve currency; or the IMF could, linked to the WEF and the BIS.

      1. Any Central Bank Digital Currency will be created in the most Orwellian manner possible. The people will have no say. Your worst fears are guaranteed to be realized. You should know this by now.

      2. —> Any Central Bank Digital Currency will be created in the most Orwellian manner

        Digital currency is also being created by the free market while also being fully redeemable for market gold and/or silver. The gram is used as the standard unit of account.

      3. NO! Those of us already affected by poverty use cash and coin outside of your SYSTEM. Stop with the elitist classist technocratic NON-solutions. Again, NO!

      4. Do you realize that cash (legal tender) is all debt based and and as such, is actually part of our inflationary debt problem ? How do you feel about trading fairly by using prices but without using debt, such as a barter practice ?

      5. EB, really a quality column and concept. Is it any wonder congressional critter bribery dollars are rolling in, lobbying against Omarova’s appointment.
        US Chamber of Commerce, Banking Round Table (funded by the fastest of cats), as well, their media acolytes will fall in line on que. The FTC (L Khan) s also drawing heat from the usual Too Big suspects.
        It’s a huge uphill struggle, let’s see if there is even a spine left in leadership. Much is riding on it.

      6. If any entity is to be permitted to create monetary units out of thin air, it ought to be government, not a bank-owned central bank and not individual banks. Those who continue to clamor for a return to gold have a point, which is that a current denominated in something tangible establishes a level of purchasing power stability to the currency. That said, gold (or silver) have many negatives, not the least of which is the costs (financial an environmental) associated with the mining, refining, storing and providing security from theft. There is one class of tangible goods that has been proposed in the past but given little serious consideration: construction bricks. Construction bricks have all the the positive characteristics of precious metals and none of the negative ones. They have a constant, universal demand. They can be produced almost anywhere to a uniform standard. Huge, secure facilities are not needed.

        Regardless of whether government simply creates monetary units on a computer and then spends these units into circulation, commercial banks should not be permitted to create money by making loans to persons or entities. Banks must raise the money they lend out, either by taking in deposits, selling shares of stock, issuing bonds, selling other assets, or borrowing from other banks or investors. Banks creating money is nothing more than legalized fraud.

      7. Ed, why are you thinking top-down rather than bottom-up ? You and I are entities who can also create, price and distribute market based money that’s debt-free.

        Have you’ve conceded to a world that relies solely on debt ??? Governments and central banks cannot enter debt-free medium into circulation. It’s not only not their responsibility, they have no desire to dangerously POP the massive global debt bubble, which is where the uniqueness of the free market comes into play.

        The mighty consumer can now legally and lawfully monetize his/her own sovereign gold and spend it directly into the real economy in support of real economic growth where the real growth is the focal point and the end-in-mind.

        We must be as wise as serpents, yet as gentle as doves. 🙂

        The economy wins.
        The value of legal tender wins, like dollars.
        The value of market bullion based currency also wins.

        We need some monetary “Yang with our Yin”, the only way that the monetary model can be completed and attain balance and symbiosis.

        https://members.lode.one/register/joinwith/1130057960/link

      8. Citizens cannot ‘create money’ without a license from the government. Citizens can trade with goods or with credit, but money is a state monopoly and should be so. Most people have a confused and incorrect notion of the origins of money. Go back to ancient Sumer and we find money for the State to pay soldiers and taxes used to get it back. Thus the monetary economy was born. Before money, people just used credit except for trade on the periphery where what we think of as barter took place. David Graeber’s Debt: The First 5000 Years tells this story. MMT enlarges it to the present day.

      9. The history of money is a bit more nuanced. There was commerce before there was government. Even as recently as the colonial era in North America when coinage was scarce and paper money not yet in use, various commodities served as mediums of exchange (i.e., as money). Yes, there was government, and taxes had to be paid to government with approved money, but those who lived on the frontier had no government money and paid no taxes; still, they engaged in trade using tobacco or animal skins or salt as the medium of exchange.

      10. –> Citizens cannot ‘create money’ without a license from the government. Citizens can trade with goods or with credit, but money is a state monopoly and should be so.

        That’s not quite true. I’m using the term “money” as per the rules of the free market , a term that is respected by law. To appease your post, we can simply call gold as “tradable asset” if the spitting of the legal hairs is important to you. You and I can create “gold money” but what we cannot do is deem it to be legal tender because that is the excusive domain of the state. Let’s not confuse money in the broader sense with legal tender. The two actually empower each other in a symbiotic Yin-Yang when the free market monetized its own debt-free assets to spend them directly into the economy in support of real economic growth.

        The above symbiotic relationship is made efficient , only on the back of the freely scalable price model that now operates in real-time. —> (USD/oz) A great thanks goes out to real-time market pricing , a development that looms large here on the back of what the Bretton Woods agreement set up for the whole global market. The fixed price had to be served in order to allow the marketplace to monetize its own bullion.

        When market gold backed medium moves into circulation, a process that has already begun, real economic growth can then gain transaction and on the back of real economic growth, central banks will be able to raise rates and raise then safely for a full economic win-win.

        The economy will benefit with real growth.
        The value of legal tender will rise…. especially the USD
        The value of debt-free bullion based currency will also rise.

        more …
        https://members.lode.one/register/joinwith/1130057960/link

      11. As is frequently said, the perfect is the enemy of the good. In my opinion, the perfect is impossible to achieve. The closest system to perfection is receipt money as was issued in the 1600s by the Bank of Amsterdam. The Bank of Amsterdam was the last financial institution organized as a deposit bank not empowered to make loans. Its depositors could act as lenders by transferring their deposit receipts to others under contract that required repayment at some time in the future with interest (interest at the time meaning coinage minted out of gold and silver). The next closest to perfection is receipt money denominated in units of construction bricks. Inasmuch as many countries have significant stocks of gold and silver bullion held in vaults, these countries could agree by treaty to monetize most of these precious metals into coinage of the same metallic content. Thus, the coins would exchange with one another at par. Their use could be restricted to government-to-government exchanges. IF paper currency or its digital equivalent is to continue to be created, its direct creation by government involves no addition to government debt. The risk that must be managed is the risk of inflation. My thought on this is that government-created monetary units be spent into the economy for Congressionally-approved infrastructure projects.

      12. “My thought on this is that government-created monetary units be spent into the economy for Congressionally-approved infrastructure projects.” According to MMT, that is precisely how government money works right now, but not only for infrastructure but for social services, et cetera, including for the military. Congress spends, Treasury creates the money, money goes into the economy and does work, the IRS taxes it back– a nice energy loop.

      13. A Federal Reserve Note is legal tender. The Fed does not print these notes, but they are printed for the Fed. They are not issued by the U.S. government. As Alan Greenspan admitted some years ago, the Fed does not even have to order Federal Reserve Notes to be printed. All the Fed needs to do is add some number to its balance sheet as an asset, then use this newly-created asset balance to purchase government securities. Now the Fed has a new asset on its books, an asset that yields some interest income, and the U.S. government has the legal tender to spend. In all other financial arrangements, a note is evidence of a promise to pay something; in the case of a Federal Reserve Note, however, there is no promise by the Fed to pay the holder anything, the only promise being that a member bank will, if requested, exchange coinage minted by the U.S. government equal to the nominal value of the Federal Reserve Note offered. What is the advantage of this system over money creation directly by the U.S. Treasury, allocated to government departments for spending as needed.

      14. –> The Fed does not print these notes, but they are printed for the Fed. They are not issued by the U.S. government. As Alan Greenspan admitted some years ago.

        So much for the limitations of legal tender in that case. Far be it from a mature society to allow all the monetary power to be consolidated at the apex of classical structure though. The biggest accomplishment that central banks have made is not so much in the currency (debt) application but at the “other end” in the engineering of the fully free floating price model, a price model that can now be used by the free market for debt-free transactions by comparing the trade value (price) of two debt-free economic goods or services for direct swaps. No debt used. Real economic growth then enters into a whole new chapter for sustainable growth and efficiency as the free market “adds the Yang to the Yin” as a process to monetary completion.

        Balance and symbiosis are a work in progress as the free market “adds the Yang to the Yin” for a symbiotic win-win.

        It’s ironic to read many posts in favor of trading systems that bring power to the consumer while skipping right over the idea of the consumer owning and utilizing his/her own debt-free sovereign money.

      15. Mr Glenn, you seem to understand details of monetary transactions, but not the fundamentals of money. First, the Fed is not an independent agency and while its actions with money are complex, in essence it is an agent of government. In the simplest case, Congress issues an order to spend and the Fed fulfills that through the Treasury. That it does a lot more is not the matter. There is no such thing as individual sovereign currency–money is always public. Individuals barter but do not ‘make money’ without a Federal license. Except in El Salvador, you cannot pay taxes with funny money like BitCoin.

      16. Sorry to confuse you with facts but I own my own money and I know many others that do. In spite of it not being deemed legal tender, it’s perfectly legal and lawful to use in agreed upon trades.

        Legal tender was very accommodating in regards to how it set up the right conditions when it facilitated the severing of the fixed price peg that hindered gold’s liquidity, that same fully scalable price model that now makes market gold a form of market based money that has fully scalable trade value and economic reach. Gold could never be monetized by the marketplace if the price remained static. Impossible.

        Americans were handed back the legal privilege of owning and using gold again on Dec 31, 1974, only AFTER the price of gold was set free from the fixed peg (1971) and given over to the marketplace. If you want to speak about monetary facts, don’t forget that a completed monetary model requires the “Yang” to be added to the “Yin” for balance and symbiosis to ensue. This market driven process has begun and both gold and silver are now being digitally monetized for market based transactions where the digital medium is 100% fully backed.

        https://www.usgoldbureau.com/gold-confiscation

      17. I would hope we could refocus on Ellen’s essay. Embedded in that material is Saule Omarova’s well argued, The People’s Ledger. Omarova is being considered for the head of the Offices of Comptroller of the Currency which makes this idea worthy of serious consideration given the current interest in the US for public banks at the city and state levels similar to the Bank of North Dakota.

        It’s importance is beyond the US given the activities of China’s BRI, the Asian Infrastructure Investment Bank and the parallel BRICS bank and the overlapping memberships which have as part of their focus the dedollarization of the world’s reserve currency.

      18. I understand the need and the accounting function of the ledger but there is no personal sovereignty in the centralization factor of the ledger. I’m not saying the ledger is not a good feature but only that the unit of account for the circulating medium should be callable as a lynch-pin for honesty and professional ethics in abiding by balanced monetary fundamentals. This means that the unit of account would have to be callable for delivery. That would require a physical substance with monetary qualities.

        A well designed monetary model has to satisfy supply discipline and inflationary factors and not only focus on debt management. The law of weights and measures covers both extremely well.

        By having a mass based monetary unit of account represented by a mass based unit of account for the currency, as the proxy, we can now satisfy the laws of the economic marketplace and provide a win-win for all sectors of the economy.

      19. a little help here, Michael

        1) One of the issues with the public banks is ownership. The CB is owned by the pv’ts. What is to prevent making the CB a true public ownership for obvious reasons

        2) Banks, as with other enterprises, have many functions. As with India, what prevents the CB to open a public window for citizens or fill multiple functions

        3) What if the relationship of a CB and the “State” with regards of functions changes

        What happens with the issues you raise if the CB’s function changes and how money moves thru the system. It seems to me that your argument is based on the current structure being maintained which does not make it a “People’s Ledger, People’s Bank.

        As has been discussed here and elsewhere, the rise of digital currency is but one issue. The US has the highest debt/gdp which may not be curable via MMT. Additionally, the other countries are growing restless with the US weaponizing the dollar. That seems to indicate that “times are a changin”?

      20. This is a broader understanding that what I have expressed, thus far, but based on the engagement of lucid conversation, I’ll expand.

        First, let me say I have no problem with state banks or local banks from the standpoint of ownership and structure in the context of managing accounts in the legal tender context. Improvements in structure, management and distribution and costs are always a good thing in terms efficiency. That doesn’t and can’t make legal tender perfect, however.

        The problem lies in the debt based legal tender, the lifeblood that flows to keep the economy afloat and vibrant. It does matter how you slice and dice debt, it’s still debt and it will eventually cannibalize the economy over time. We seeing this now. A debt based system is simply not enough, on its own and is doomed to failure if left without a symbiotic partner. The debt based system is like a “Yin” in search of symbiosis and a Yin without a Yang is doomed. It cannot survive based on the nature of its creation.

        Central banks are keenly aware of the above.

        Are you are aware of the salient points of the Bretton Woods era and that the really profound value of the USD is found in the price tool, far more so than in the currency (debt) application ? It’s the proper use of the price tool that empowers the value and the real economy on the back of DEBT-FREE transactions that the USD now supports in debt-free trades.

      21. Again, Mr Glenn, you show a limited understanding of money. I understand a Federally issued bank note as a ‘promise to pay’. It used to be a promise to pay gold or silver, but now it is just a promise to pay…perhaps another bank note. It is a debt issued by the government which is legal tender for transactions and for taxes. Right now, all other forms of ‘money’–bitcoin, gold, etc–are just commodities, & like any commodity can be traded for other commodities. This has always been the case.

      22. You’re way behind.

        –> Again, Mr Glenn, you show a limited understanding of money.

        This is actually funny. I’m taking what you already know and adding to it so that the twain between dollar based pricing and fully gold backed market currency (by the market , not by fiat) , currency with real-time pricing which can support SUSTAINABLE real economic growth where the free market adds the much needed “Yang” to the existing Yin” and where you are stuck in the “Yin” , based on your only current vision of money as an IOU by fiat (legal tender).

        The law of weights and measures comes to fruition with gold backed weight where the trade value (measure of value) of the weight takes place with USD real-time pricing. (USD/oz) This calls for a full understanding of the USD price tool versus the debt based USD currency. They are distinct services. A price tool is not a debt instrument and the USD price tool now supports DEBT-FREE transactions within its symbiotic relationship with gold’s weight. Gold is a wonderful form of money if the trade value can be properly measured by the free market. This is the function of prices, as measure of value.

        Liquidity is not synonymous with debt !!! Let me stop here before I totally lose you. Do you think liquidity is synonymous with debt as per market principles and economic law ? Y/N ?
        Can liquidity be debt-free ? Y/N

        I cannot take you beyond this point without these two answers. I will have to leave you “in the dark”.

      23. –> The closest system to perfection is receipt money as was issued in the 1600s by the Bank of Amsterdam.

        That’s just silly considering that debt-free assets can now be traded with dynamic market balancing by comparing prices in real-time. They had no real-time pricing capability back in the 1600’s of course and there is certainly no practical way to pour new wine into an old wineskin, so the solutions we have today would simply have to wait.

        If you want to be in the conversation, you have to appreciate the elephant in the room. The economy is a real-time event ! Congruence with reality is mandatory and non-negotiable within economic laws. Without a real-time price model combined with the ability to compare prices in real-time, there was never any way for our trade practices to be fully congruent with economic fundamentals. There would always be liquidity challenges that lead to the temptation of using debt and over-leveraging the use of debt.

        https://members.lode.one/register/joinwith/1130057960/link

      24. hi Edward

        Are you and/or who else is on this exchange would be interested in pursuing the ideas of Omarova with a public bank or alternative

      25. I fully support Ellen’s call for a system of public banks. Banks should be operated as public utilities and not as for-profit corporate enterprises. As we are unlikely to ever get the legislatures to nationalize the banks, the best we can hope for is to get every state to establish a public bank, and additional public banks in large cities and in regions where financial services are in short supply.

      26. Banking is not only about ownership. Let’s not overlook the all important nature of the medium, itself.
        State banks would still exist and play within the debt based paradigm and that kind of model, on its own, is simply not enough to satisfy the ongoing needs of a growing economy. Debt has acceptable limits as does inflation. It gets toxic beyond those boundaries. We’re seeing this now.

        A debt based monetary model is like a “Yin that has no Yang” and requires a symbiotic debt-free influence to empower it, something that can only come from debt-free assets that are generated and used in circulation from the free market economy. The free market can create , price and distribute its own market medium as a symbiotic complement to debt, thus allowing for REAL economic growth along with the safe and sane raising of interest rates to have inflationary debt safely purged and retired.

  2. With CBCD and with the private banks limited to intermediates what happens to international financing of sovereign debt. Given the size of the private investment banks will we see country debt financed by the private sector and the CBDC? The CBDC under MMT could, as in the past, create debt jubilees and be in competition with private equity. This could also function for individuals if the CB, as in some countries, issues bank accounts to citizens.

    1. Yes agreed. See George Gammon’s video on what the PBOC can do with the DigiYuan. Our central bank could do similar things globally. It could arguably buy up foreign sovereign debt and write it off. We need our own Great Reset, not the World Economic Forum’s but a Reset for the People globally.

      1. Michael Hudson well documents that the end of WW1 the US would, as has happened in the past, forgive debt of allies. The US refused and that set in motion reparations on Germany and placed Britain and Japan in an obligatory position with regards to trade and foreign policy. The results, as we know, was more than problematic, euphemistically speaking. The WB and IMF, under the Washington Consensus, has reinforced this practice as well documented by John Perkins in his books describing his role for the US as an “economic hitman”. And, we see this wrt Greece and other countries who have liquidated social support and other assets to pay sovereign debt.

        This is one of the reasons that the AIIB and BRICS banks were created- basically to circumvent the dollar as the global reserve currency. Thus, as I note in an earlier post, there is need for the US CB to become a public bank and to reassess it’s position with respect to the “weaponized” dollar as an instrument of foreign policy in the hands of Wall Street and the pvt banks. The issuance of a CBDC needs to be assessed wrt both US citizens and the position of the US, internationally.

        The issues play on the world stage and particularly with planetary concerns to get to “Net Zero” which goes well beyond “climate change”. While humans can forgive debt, Mother Nature can not declare a resource Jubilee and “forgive” the debt caused by the “borrowing” from the resources of her future residents to feed the exponential growth of the financial sector today.

      2. A reset is very different and very undesirable in comparison with a market morphing where the people’s own debt-free MARKET based medium can be used to grease the wheels of real economic growth. Real economic growth, as we know, can easily allow inflationary debt to be safely purged on the back of rising interest rates.

        The central banks cannot enter debt-free medium into circulation , as defined for the above. It has to be market driven as to avoid a massive debt bubble POP in favor of a leak.

  3. I don’t trust politicians, and I don’t trust bankers. The fed is a disaster, and so is Biden and all he does. I will have no part with any politician, and will not approve of anything they do, being that they are all puppets and work for the enemies of humanity. MY book ANGRY LOUD AND CLEAR TRUTH gives in the conclusion a blueprint for an ideal civiliization, and it is NOT capitalism or communism. A totally new, out of the box concept, with roots in the Amish and in kibbutzes. For a free copy go to my website and sign up for the free newsletter, my books are always attached.

    http://truthforceinternational.org

    1. Are you aware that market gold and silver are both now being monetized and used by the individual as debt-free digital currency ? Full bullion based backing, sovereign and debt-free.

  4. Excellent, Ellen. So glad to see that you go on without me and equally happy to hear that Prof. Richard Werner is still holding the line. Recent legislative proposals trying to back-door total spying must not be allowed, or all of this alternative finance goes completely out the window.

  5. Never in human history have we had money that is not fungible. I don’t care how you want to present this terrible idea — it would be a dystopian nightmare. One way or another everything you purchase would be monitored. It would essentially be like the Mark of the Beast and I’m a secularist. They are trying to push this by first implementing vaccine passports . . . also the Mark of the Beast. Here is my take.
    https://brucecain.substack.com/p/the-primary-goals-of-the-plandemic

    1. –> Never in human history have we had money that is not fungible.

      Bruce …. we never had real-time pricing either. Are you aware that market gold and silver are both now being monetized and used by the individual as debt-free digital currency ? Full bullion based backing, sovereign and debt-free.

      Don’t fixate on the Mark of the Beast ….. there are two marks in that script. 😉

      https://members.lode.one/register/joinwith/1130057960/link

    2. Money’s true nature is law. Ergo, once it leaves a nation’s borders it has broken the iron rule of economics, one where the fungibility should not have happened, Never let your national money leave the nation’s borders. You cannot extend your law without force, and ultimately war.

      Thoughout history, Oligarchs and special interests have attempted to make their nations money the “credit” of the world. They want to sell their excess goods and wares, and make guaranteed profits.

      Here is Hudson on the concept of Creditocracy, which in turn requires the fungiblity you are shilling for.

      https://michael-hudson.com/wp-content/uploads/2021/07/Hudson_Valdai116.pdf

      The only real question is how do you design the feedback nodes for your national currency, so it cannot be abused and is transparent. How is the money power codified? In my opinion it must have transparent feedback nodes, and not abuse the iron rules.

      WW2 was largely about Germany disconnecting itself from the international financiers, so said international finance could not longer take usury and sordid gain. There were four players, the Sterling Zone Creditocracy, The Dollar Zone, The Communist International (which was funded initially by international finance capital), and the emerging National Socialist German System under Schacht.

      Schacht’s system, which used trading banks, isolated national moneys so they were NOT FUNGIBLE.

      Goods moved about internationally in the trading bank system, but the national money stayed put.. within the Nation’s borders.

      1. Money’s true nature is governed by economic law, not law by fiat. As such, a natural form of money like gold or silver knows no political boundaries. The laws that it abides by are supply, demand and the market’s valuation for it’s trading value when used in agreed upon market based trades.

        This still applies today and the historical advantage today is that bullion has now been married with a USD price tool that now works in real-time. This brings about the very manifestation of the old law of weights and measures , a law who’s references go back to the Old Testament.

        The manifestation of gold’s proper use could only come about with real-time price measurements for its trading value in order to be congruent with true market fundamentals , given that economy, as a fact, is a real-time event and has always been a real-time event. Congruence with this reality is mandatory or your money system will always struggle in dysfunction. It’s explains a great deal, doesn’t it ?

  6. finance is so convoluted a mechanization no one we kin this remedy. And:
    W/o an asset tax nothing will work. Batteries of lawyers and accountants
    will obstruct all factors….that might lead toward democracy.

    How will Manchin vote?
    i feel that if you cannot explain it to the people it won’t work.

    any nation that can fly palettes of freshly printed cash into the Afghani corruption morass is bound to cheat it’s own people.
    and they say there isn’t enough money for health care only enough to BURN…
    Investors are buying up basics like food and shelter….with borrowed money because they do not earn anything, they only OWN everything.

  7. finance is so convoluted a mechanization no one well kin this remedy. And:
    W/o an asset tax nothing will work. Batteries of lawyers and accountants
    will obstruct all factors….that might lead toward democracy.

    How will Manchin vote?
    i feel that if you cannot explain it to the people it won’t work.

    any nation that can fly palettes of freshly printed cash into the Afghani corruption morass is bound to cheat it’s own people.
    and they say there isn’t enough money for health care only enough to BURN…
    Investors are buying up basics like food and shelter….with borrowed money because they do not earn anything, they only OWN everything.

  8. So Powell is concerned about counterfeiting and fraud. That describes the basic business of private banking. The banksters create the money digitally (counterfeiting), lend it (fraud) and if the banksters forclose or reclaim (theft). There is so much that can go wrong with a CBDC criminally, in a disaster like fire, ice, hurricane, massive solar storm that closes all electronics down, or puposefully through control efforts or cyber warfare as is possible if Wall Street tries to take down the Yuan, I think keeping a basic store of cash seems wise. The local farmer will always take cash for food. As will the local gas station. Many actually charge less for payment in cash.

    1. Yes agreed, hang onto some cash, and gold and silver and anything else fungible and tradable. Maybe set up a local community currency. Whether or not we have a CBDC, most of our money is digital and can go down in a cyber attack.

    2. Antisandman i agree 100%. Add to that privacy rights, Freedom of speech, freedom of assocuation, and for us to be secure in our persons and our effects, digital currency is a bad idea. Alone the fact that China has it should discredit it.

      1. I hesitate to argue directly with people on this forum, preferring to show more valid analyses. However, this idea that ‘if China is for it, then I am agin it’ is just hare-brained and dangerous. Try the same with high speed rail or poverty reduction. Frankly, most intelligent people see China as a leader, not a demon and are quite willing to learn from her experience.

      1. What if DARPA created the Satoshi myth along with Bitcoin and Zimbabwe is the next domino for a controlled unwind from the petro dollar then the political theatre of Senate hearings around a ‘ People Ledger ‘ are XXXX¿ IDK… but the last comptroller was a Manchin raider who brought in another Countrywide pleb who came over as the top dog from legal at Coinbase. Shits already in play I say unless someone convinces me it wouldn’t be. Hodl.

      2. Yes! An amazing read, but it has been 8 or 10 years. Remind me what I should remember. I look forward to reading his last, “The Dawn of Everything”. Ellen’s book “The Web of Debt” is also a must read. Other informative things I have read include an article in Harpers June 2010, “The Food Bubble”, which extrapolated to today, helped me understand the real reasons for artificial inflation for which Wall Street is always giving Econ 101 excuses. Somehow whatever causes inflation, Wall Street profits and the 99% pay. Another is “The Asylum: the Renegades That Hijacked the World Oil Market” by Leah Goodman McGrath. Reads like a crime novel, maybe because it’s a crime non-fiction.

    3. You’re assuming a very myopic view of the USD, one that Powell doesn’t share, nor do monetary scholars.
      The dollar is far more than a currency , as a debt based exchange medium. It also acts a price tool to measure the trade value of market goods and services and can now be used for conducting fair and direct swaps that are debt-free, all in support of real economic growth. Call it “balanced barter” if you like. Have you ever used the dollar that way ?

      1. I am assuming only that there are many reasons to have cash on hand. What do we do if a fire, flood, hurricane, ice storm, earthquake, category 5 solar storm system glitch or any number of other factors disrupt our fragile systems? I do not expect to be able to live for a year or two on a stash of cash. Three months should suffice. ,

  9. Wow, if indeed that would be the case it is an amazing and welcome turn-around. “Free Fed Accounts for all… but not free healthcare for all? And ending the banks privilege’s of creating our money as debt for profit? Hard to believe but that is what needs to happen. Government should be the exclusive issuer of the nation’s money to fulfill the purpose of our government as articulated in the 1st sentence of our Constitution and to allow the redistribution of land and the restoration of the biosphere.

    1. Yes a public national bank or banks, not private banks, should be the issuer of the national currency. That was the original “American system” of the colonists, Hamilton’s bank, and Abraham Lincoln. But there are also obvious risks and challenges, and those need to be protected against and worked out, as Jerome Powell himself acknowledges. We need some brilliant young computer programmers on the job …

  10. Even if there is a good case to the made for CBDCs, there are far more bad cases to be made for them. To release this article with dystopian digital vaccine passports already in use around the world, well that’s just terrible timing. If some future U.S. government decides to go cashless, a current pledge to continue the availability of physical cash will be as worthless as your former money.

    1. Maybe, but here’s the thing — it’s probably going to happen. Most other countries are designing CBDCs, and the US Fed is studying it. Our money already is 95% or so digital; the government can already do all those things people worry about with a CBDC, including turning off your bank account. The challenge here, as I explained in a comment above, is to design one that works for the people and not against us.

      1. Most countries are threatening us with “the stick” of inflation as a necessary evil that drives people toward “the karat”. A habit is not an easy thing to change and since asset based money has to be safely introduced from the bottom-up, desperate measures are called for to get people to shift their habits.

        In a real-time price environment such as what we now have, a top-down INTRODUCTION of asset based money such as gold or silver is out of the question. It would be far too dangerous. It can be accomplished safely, but only from the bottom-up with an organic rate of change governed by market consciousness. The consumer now has the monetary stage here and the process has already begun.

        Spending asset based market money directly into circulation, debt-free, leads to real economic growth and then a safe and sane raising of interest rates to have inflationary debt safely purged from circulation where it can return to the very nothingness it was created from.

  11. Every time the government tries to do something in the end they always make it worse. For instance, they want to help people so they increase the minimum wage. Result, they increase the amount of automation, actually decreasing unemployment rather than increase it, because increasing the minimum wage, increases costs making the country less competitive so they have to be more efficient to pay those wages. Everything government does always backfires on them because people react to what they do.

    If some people want to have digital currency, that’s okay for them if that’s what they want. But when the power goes down for what ever reason, storms like now in British Columbia, or war, or solar flares etc., it’s good to have paper money in your pocket that you can still contract business with out any kind of power. People have already lost billions in money putting it into these cry to-currencies where the dealers trade against the. There’s no store of wealth. You can be rich one day and have to declare bankruptcy the next. Or people put money into some bank because it pays a higher rate of interest, only to find out the next day that you can’t bring up the website any more. When the police ask what the person looked like, you have to say well it used to be right here.

    My position is there’s a fool born every minute and you can’t protect these kind of people. For me, I want to be able to go right into my bank. I don’t do online banking, which many people find convenient. If I can’t go into my bank, I won’t bank there. I trust only cash. And the banking rules have been long established, so I know where I stand.

    When there’s war, the first thing to be attacked will be the satellites taking down all communications, then what. The US dollar is the the reserve currency because you can take ownership of it. If the USA goes down the road of CBDC, they’ll have no advantage over any of the other countries. I want the freedom to do what I want with my money. I don’t want social credit scores that will disadvantage me because they don’t like what I do with my money.

    The USA is the reserve currency for one reason, because you can take ownership of it, and they don’t cancel their currency. That’s it. Period!

    1. Yes definite risks, but see my comments above. The currency is already 95% digital and could go down in a cyber attack; Omarova recommends keeping cash as legal tender and providing ready access to it; and if we don’t have a CBDC, China or the IMF could swoop in as global reserve currency with theirs.

      1. Ellen they would abolish access to cash in a minute, just as they did with gold.

        Centralism is authoritarianism.

      2. It seems some confuse the Fed, China, the IMF, and digital currency–all very much separate vehicles. Right now, almost all money is digital. Having accounts at the national bank would just rationalize and democratize this trend, basically cutting the legs off the big banks and financial institutions. I don’t see why this is objectionable at all.

      3. —> they would abolish access to cash in a minute, just as they did with gold

        Gold’s abolishment was based on the fact that it had a fixed price peg and that peg had to be totally re-engineered to suit free market capitalism. The price model was only set free to the marketplace in 1971.

        Gold is now perfectly legal and lawful for agreed market trades on the basis of both sides being in congruence. Gold and silver are now used n debt-free digital transactions daily….. and its growing.

        The legal door for gold ownership came about on Dec 31, 1974, only after the fixed peg was severed in 1971. The marketplace can only monetize gold on the basis that the marketplace also sets the price. The fixed peg was in the way.

        American simply fee asleep with the news or had gotten too cosy with the debt based legal tender.

        https://www.usgoldbureau.com/gold-confiscation

  12. Digital currency could be issued to the broad spectrum of private business to pay off debt, small and mid size business, 60 million mortgagees monthy— to pay say 25% of their monthly mortgage payment and likewise cooperative business (employee owned) to pay say 50% monthy debt.

    1. Yes it could be a useful tool for many things, including a widespread debt jubilee, and debt-free funding for infrastructure. We just need to figure out how to get a government that is honest, truly democratic and works for the people; and how to set up a CBDC that is uncorruptible.

    2. Would the issuing of the digital currency be debt based or asset based and debt-free though ?
      You can’t purge debt with more debt, even if the interest rate is zero. You would still have an inflationary challenge.

  13. Brilliant analysis, issues badly needing public explanation and highlighting, easy to understand, and very helpful – as always.

      1. Ellen: I think everyone with more than two neurons and a heart understands how hard you work and how good your analysis is. And here is the But, you also want to feel that those pathological narcissists on Wall Street and their mercenaries and minions in DC have a heart and soul. They don’t. It will take massive non-cooperation like in the 60s and maybe more.
        What you do with the Public Banking Institute is wonderful and I commend you.
        The current capitalist crisis reminds me of 1957 and Sputnik. 1958-1968 CA built 4 UC campuses and 7 state college campuses and increased funding of Cal Tech. UC was already administering Los Alamos and Livermore National Radiation Labs. Now China is creating a similar crisis for capitalism. That is why we are seeing money for Build Back Better and CA is going to fund a Polytechnic University at Humboldt State. As you remember tuition at CA state universities was free. Then Reagan became governor running against those ungrateful and unruly hooligans at Cal. He was the perfect sock puppet for the neoliberals. His brain was already calcified but he knew well how to convincingly follow a script. Along with UK’s Maggie with a brain also similarly calcified the neoliberals turned back the New Deal with a vengeance that only psychopaths could do so thoroughly and heartlessly.

  14. A superior form of decentralized money that is fully market driven has now been developed on the basis of the individual’s own personal gold and silver bullion. Precious metals have now been digitally monetized with a mass based unit of monetary account (gram) to act as the proxy for bullion in a 1-to-1 one relationship, gram for gram

    This gives the marketplace a gold backed gram, versus what we used to have in a gold backed US dollar.
    The former can utilize real-time market prices to be congruent with economic reality whereas the fault of the older system was that gold used to have a fixed and pegged price….. a dead end street over time.

    Gold and silver have now spouted wings and a convenience that features fully scalable debt-free liquidity in a pursuit to drive real economic growth that can now, for the first time, be made fully sustainable.

    more…. Settle with Metal

    https://go.lodepay.com/iso/?fbclid=IwAR3DA2ufSCXxnqroEbYUiwuyUsDKDtMFkVeD5LwwAwaWymx1KJPViFop8UA

    1. It might be useful to consider the origin of gold as currency. It was not because of innate value (although there is a market for gold as ornament) but because it was durable, malleable, and plentiful enough for coinage. That gold is shiny is a side-effect. Gold never had ‘intrinsic value’, just social value; as such, it as much illusory as any other monetary standard.

      1. You’ll find out just how much of an illusion gold is when you drop a brick on your foot. lmao

        Your post is a word salad. Gold is debt-free, rare and can now be measured for its trade value in real-time for the sake of using as a medium within balanced barter. What’s new is the real-time pricing in order to be congruent with economic reality given that an economy is a real-time vent ! It always has been which should easily explain past monetary dysfunctions.

        —> Gold never had ‘intrinsic value’

        Are you kidding me ? It’s intrinsic to the work done and energy spent that creates a finished coin or ingot. It carries no debt because the debt has already been paid by the sweat of the brow.

  15. Outstanding article. Ellen Brown needs to be heeded in progressive circles around Washington ASAP. She holds the keys, the Ankh, to a Living Economy for the underprivileged 99%.

    1. Thanks! How nice, another positive comment. I knew I’d get lambasted with this article and was hesitant to post, but I have written a lot about the potential of a currency truly issued by government, not private banks, and thought I should jump in with a discussion of the positive potential. Risky, yes; but promising nonetheless, the possibilities posed by returning to the American system of the colonists and founding fathers. The Chinese are doing it now, and running circles around us in infrastructure, development, and social services.

  16. Consolation of financial control and zero privacy that cash affords is the devil in the details!

  17. I’m curious to know if Ms. Brown has had a chance to read Whitney Webb’s report out of the COP26:

    https://unlimitedhangout.com/2021/11/investigative-reports/un-backed-banker-alliance-announces-green-plan-to-transform-the-global-financial-system/

    Her report suggests a top down reengineering of the global financial system is underway whereby, under the guise of sustainability, all natural assets are rendered as streams of profit for the benefit of private, financial stakeholders.

    This seems to be in line with the World Economic Forum Great Reset narrative and the commodification of everything, as has been covered in great detail.

    I imagine Central Bank Digital Currency will figure prominently in such a system, but I find it difficult to see any silver lining to what is otherwise a system of financial slavery controlled by unelected private bankers.

    1. Yes I have read that article by Whitney Webb, and my last article was based on her work, which I love. Quite brilliant! Agreed, a CBDC is a risky venture; but it also has huge possibilities. See my multiple comments above. What we need is to throw back the curtain on all the corruption behind the scenes — total transparency and freedom of information. I think if enough sunlight were shone on the issues, and we got some brilliant young computer programmers on the job, we could come up with a people-backed currency that works according to the principles of freedom and fairness set out in the Bill of Rights and Declaration of Independence. We are living in revolutionary times; rather than just fearing the threats, we need to design the next system in a way that works for all. How do we make this thing work? That’s what always interests me.

    1. GS was developed as a band-aid remedy in view of the fact that at that time, the price of gold was fixed and pegged by fiat. The problem was NOT gold, it was that particular gold standard that featured a fixed price peg and therefore , restricted liquidity. It was dysfunctional, given the limits of capability of the day. Gold is a limited and finite resource. The trade value of gold, meaning the price, has to be scalable to adhere to true economic principles. (usd/oz) Gold can now be market monetized by the individual along with real-time price measurements for its trade value.

      We don’t need GS. We need the consumer to wake up and monetize his/her own market bullion and simply spend a little.

      https://members.lode.one/register/joinwith/1130057960/link

    1. That would pretty much be the result. Without deposits, they couldn’t do much. They’d become “narrow banks” or mutual funds but couldn’t create money as credit on their books.

  18. Crypto currency,
    Can be engineered as usury by bank’s. Because usury is created from numbers game. From thin air. Which is in one sense criminal. And those who take out a mortgage, have to pay back with there real hard earned money. Usury is an invisible tool.

    1. The free market needs its own sovereign money, a version that can form a symbiotic relationship with the existing USD. We need some “Yang with our Yin”.

  19. How will there be transparency for digital central banking? Does this involve seignorage reform? Local public banks for local investment – sounds like a great approach especially if linked to “land value return” approach to public finance in order to eliminate land speculation, hoarding, and profiteering.

    1. Yes agreed on public banks and land value tax. Designing the system transparently while preserving individual privacy — that is the challenge! It sounds like Powell has a team working on it though. As much as people don’t trust Powell or the Fed, when I listen to them talk, my intuition says they’re honest and trying to do right. Powell is US-protective, not WEF-oriented. He stood up to Lagarde.

      1. It would still be an inflationary threat, even if debt remained under control.
        The ultimate form of decentralization is consumer driven where the individual owns his/her own asset based, sovereign money. The US already set the legal stage for this on Dec 31, 1974

    2. At the present time, only certain banks can go to the Fed window. The CB’s funds get into public hands thru the pvt banks.

      As in India, the idea is that any citizen or authorized person can have their own account at the CB. In essence the CB becomes a public bank with types of services to be determined and additional banking functions handled by others.

      Right now, the Public Banking Institute is pushing for public banks, currently, at the state level that would act like full service pvt banks similar to the Bank of North Dakota. The difference is all the fees that accrue to the pvt banks will now be back in public hands. There are other benefits.

      The proposed postal banks in the US are similar to other country postal banks. In essence they would be a public bank with services to be determined.

      At the present time there are a variety of “banks” from cooperatives and community banks. The CB with public banking functions will require existing banks of all stripes to realign their business models as such has happened with the alternative banking models.

      Similarly if the CB issues fungible and transferable digital currency freely exchangeable with other cryptocurrencies, extant banks will have to consider “what business they are in and what businesses they are not in”.

      What has not been discussed is the impact of the changing role of the CB in international trade and relations with other country CB’s and foreign policy such as the role of the WB and IMF and the US dollar in such activities. Some of this can be seen in the role of China and India in the Asian Infrastructure and Investment Bank and BRICS bank.

      1. —> As in India, the idea is that any citizen or authorized person can have their own account at the CB. In essence the CB becomes a public bank with types of services to be determined and additional banking functions handled by others.

        That structural change is still not enough if debt-free assets don’t circulate. The currency that all CB’s issue within the IMF membership is debt, Tom. IMF membership forbids the backing of legal tender with gold, not that it would be a bad thing, but the introduction process has to be organically governed by the free market, bottom-up, where the consumer now has the monetary state. A top-down introduction is out of the question now that we price our macro markets in REAL-TIME !
        The debt bubble requires a safe and sane leak, not a devastating POP !

        The above deduces to a need for both forms of currency, debt and debt-free, where debt-free currency is solely created , priced and distributed by free market means.

        Render unto Caesar ….. render unto God.

        https://go.lodepay.com/iso/?fbclid=IwAR3DA2ufSCXxnqroEbYUiwuyUsDKDtMFkVeD5LwwAwaWymx1KJPViFop8UA

      2. hi Michael

        agreed re: debt which is what we have seen with the Fed accepting questionable securities during the current game of QE. That, in part is due to the current ownership of and original structure, and is, in part, the opposition to more banks such as BND. India is not the only parties looking at options

        Lode is one of the interesting plays in the crypto currency exchange arena and one of the options, globally, which needs consideration. There is no guarantee that the dollar will remain the reserve currency and players like Lode have a place. The question is whether the current structures are the only possibilities.

        David Graeber’s opus, Debt provides an interesting history whereas Michael Hudson’s And Forgive Them Their Debt points to contemporary issues. The future is not permanent.

  20. I would go a step further. Washington would have us believe public debt is all too important and is a top priority to shrink. Everyone else outside of DC knows this is a bad idea and understand growing private debt is much more important for the health of the economy. As it stands now most private debts cannot be paid back and keeps the economy in slow growth. I would argue the public should get a debt jubilee. This would be made possible by the Fed Reserve taking on the debts owed to the government onto its books. It is past time the public get a bailout like privileged bankers get. But don’t count on this happening. Yellen, Biden, etc., wrongly believe in their bones all debts must be paid.

    1. Lowering inflationary debt in a SAFE & efficient way without a disaster can now only be achieved with real economic growth that then allows for rates to rise and rise SAFELY. The real growth can now only be achieved with the ADDITION of debt-free market based money that comes from the free market where the consumer now has the stage.

      The most interesting thing about the need and this market driven course of action is that the US government laid the groundwork and the conditions for it on Dec 31, 1974, following the severing of the fixed price peg on gold, a few years before in 1971. The door to personally monetize and spend one’s own sovereign gold has been open ever since. Americans’ simply fell asleep or got a little too comfortable with debt based legal tender.

      Wakey, wakey ….

      https://www.usgoldbureau.com/gold-confiscation

      1. Debt is easily serviced and purged on the back of real economic growth. The question is not “how do we pay down debt” but how do we now drive the real economy in order to arrive in a momentum toward sustainable real economic growth. ?

      2. when the current economy which runs on fiscal debt uses that asset to pay to extract future resources from Mother Nature’s future children in order to grow the economy today, one must realize that there is no way for Nature to declare a resource debt jubilee. Fiscal debt is exponential in its demands, advancing technology is the problem, not the solution.

      3. —-> advancing technology is the problem, not the solution.

        Oddly enough, I give thanks for real-time market prices that now allow up to use debt-free market medium to make balanced and agreed upon market trades in support of real economic growth. This chapter is just beginning

        The functional use of real-time prices and real-time price comparisons is only a result of our digital capabilities. Debt free trades now take place daily within eCommerce.

        If debt can be wound, debt can also be unwound. The trick is knowing how to do it without ripping the world apart.

      4. I am not sure I understand your point. Extraction from natural sources is not a debt that can be repaid as if there were someone who ‘owns’ nature and can sell it. That such extraction is disastrous is absolute.

        But your idea of “Fiscal debt is exponential in its demands” has been true since Mesopotamian priests invented compound interest. Debt must periodically be cancelled by fiat or by disaster; otherwise, there would be no space, no transactions, for ordinary humans because one single entity would hold all others in thrall of debt.

      5. Basically, earth’s resources are not infinite. Humans are extracting, first, the easiest. As demands increase, the cost of the next increment increases making the cost for those resources increasingly costly to future generations. We see this with fossil fuels. The demand to grow the GDP requires increasingly costly fossil fuels for the present growth and impacting on future generations.

        Financial resources are created today, largely by debt financing. Failure to repay that debt can be eliminated at the scribble of a pen. If the debt is sovereign it can be replaced through taxes or just by running the “printing press”.

        The present pulling lowest cost fossil fuels creates burdens (resource cost and non-recyclable waste as examples) on future generations. The idea that clever apes can invent a way to reduce the cost or, hopefully, find an alternative to compensate is dreaming in technicolor.

        It’s a systems problem where defining human wellbeing measured by GDP is a false script created by the financialization of the economy by the banking sector which is required to feed its exponential growth and place pressure on a natural system or systems.

        The debt created by the present is owed to its children. It has been said that when Nature created humans, a chance was taken. Intelligence might not be a survival characteristic. The planet has survived through many extinctions and will continue beyond future extinctions.

      6. –> Basically, earth’s resources are not infinite.

        Real economic growth fueled by the addition of debt-free trades is what allows us to get past this in vital areas of need. These include the need for energy, environmental preservation, food (agriculture) and health.

        The improvement for these areas of concern will require massive amount of capital to get them off the ground and make them economically efficient, something that debt cannot support if legal tender is left to itself to do the job. We’re battling a rising debt-to-GDP ratio so a new monetary direction now becomes critically important.

        We need some monetary “Yang with our Yin” as a monetary act of completion. This where the free market has been left an open door by TPTB for the pursuit of debt-free market medium.

  21. How long will fools fall for rule in our name, where those with blood on their hands are our benefactors, our best and brightest? How long the long march of slavery until neither gods or masters ‘take care’ of us?

    Who can know?

    But one highly likely variable may be how long critical apologies to reduce risk and optimize opportunity in systems designed for our undoing continue to be swallowed as anything but bait-and-switch operations of vampires hungry to drain the last drops of blood from our conquered souls and bodies.

    1. —>>> How long will fools fall for rule in our name

      As long as the public allows it. Are you aware that it’s perfectly legal and law to trade with the use of one’s own sovereign gold in the support of real economic growth ? The choice is there and has been there since Dec 31, 1974. The POTUS made this quite clear. That date could only take place once the freely scalable pricing model was in place because there was no way for the consumer to monetize his/her own personal gold with a fixed and pegged price in order to trade with market balancing and ample liquidity, both in mind over the course of time. Gold is a finite and limited resource so it’s use as money has to have a scalable trading value for its economic reach and coverage. –> USD/oz

      The fixed price on gold, which was a breach of free market principles, had to be handed over to the marketplace. This process actually began decades earlier at Bretton Woods where 1944 represents the beginning of the end of the fixed price peg, once the price model was fully re-engineered as it was.

      What happened ??? Nothing yet because most Americans fell asleep or got too damn comfortable with the circulation of OIU’s.

      The door to monetize bullion is still wide open and it’s open all over the world. Facts matter. Know them.

      https://www.usgoldbureau.com/gold-confiscation

    2. You are correct. Throughout the existence of our species. 20% of the population “owning” 80% of the wealth. Civilizations rise, civilizations fall. Time after time after time ad infinitum. Will the species evolve in time? I’m at peace with our extinction.

      1. —> “Throughout the existence of our species. 20% of the population “owning” 80% of the wealth.”

        That’s a structural problem conducive to a hierarchical paradigm. Hierarchy sucks and the apex is like a light to moths in what it attracts …. a very dark place. That very dark place can be viewed like a “Yin” that has no “Yang” . It’s incumbent on the free market to create a “rounder world” with the addition and the use of debt-free market based medium. Real economic growth can only ensue.

        Balance and symbiosis will only the desirable outcome that society craves once we add debt-free medium into circulation …… and stirrrrrr

  22. Michael+Glenn Please seek cult exit counseling. Capitalism is the antithesis to Democracy no matter the mode of exchange. Your material and financial privilege are glaring.

      1. Hierarchical supply driven capitalism that’s driven by debt has no use for democracy.
        The apex is a dangerous place where the apex is like a light to moths in what it attracts.
        It’s incumbent on the free market to create a “rounder world” that weans out the apex, a market driven process that has now begun in the grass roots where the consumer now has the stage.

    1. The first Democracy (as we know it today) was in the Lowlands. It was created so that the “creditor” could attach debts to a city/municipality.

      A King can always tell the creditor to take a hike, or expel them 109 times. This idea of democracy in the western mind, is falsely and romantically attached to Greece, when instead it was reborn as a way to harvest populations with debt servitude.

      https://michael-hudson.com/2011/06/rolling-back-the-progressive-era/

      It was a major factor enabling the Low Countries to win their independence from Habsburg Spain in the 16th century. The Dutch Republic committed the entire nation to pay its public debts, binding the people themselves, through their elected representatives who earmarked taxes to their creditors. Bankers saw parliamentary democracy as a precondition for making sound loans to governments. T

      1. Why recite history at a time when real-time pricing to sustain real economic wealth creation and distribution wasn’t possible. Can we move forward ?

        We’re not going to try to pour new wine into an old wineskin , are we ?

  23. Michael+Glenn The Cult Of Capitalism, your fetish for finance, and your obvious precious metals kink.

      1. I cannot speak for Mr Blobaum, Michael Glenn, but of all the economic systems, socialism surely seems the best for me. Free market capitalism sucks eggs and is on a quick course of destroying the whole world.

      2. In socialism , we all get poor together based on the need for the hierarchical structure and where the apex is like a light to moths, rank with temptation.

        Free market capitalism is still a work on progress with a focus on the individual’s socioeconomic power and freedom, something invisible to most at the moment because we are still in the debt based paradigm on the verge of creating what I can call a “rounder world”, where the apex is weaned out on the basis of adding debt-free consumer driven transactions into our economic habits.

        Socialisms seem to choose to ignore the sovereign power and freedom of the individual in favor of representation.

      3. How many years of capitalism’s failures do we have to endure before it gets it right? Socialism, by the way, is also not fixed and rigidly defined and is in process. My bet is on socialism, a much more dynamic and realistic model of human behavior, and the only system likely to save human civilization while its capitalist cousins bet on how high the sea will rise, how many acres the fires burn, or how much destruction the latest hurricane will cause.

      4. –> How many years of capitalism’s failures do we have to endure before it gets it right?

        When the free market realizes that the economy can be made sustainable with fully scalable debt-free bullion based liquidity that uses real-time value measurements (prices) and over-leveraged debt is then safely purged on the back of real economic growth.

        The irony is that it’s the free market that has full control of being able to agree on debt-free trades but because of certain centralizing habits, we tend to have a hard time getting off our knees. We keep looking to government and central banks for issues that are monetary while the silent reality is that they’re waiting for the free market ! They’ve been waiting since Dec 31, 1974, not so long after the price of gold was severed from that abominable price peg and the management was given over to the marketplace.

        There is no legal constraint that prevents me from trading gold for a new suit of other debt-free widgets. What’s stopping you now that gold, as a form of free market money, can be used digitally or physically ?

      5. –> My bet is on socialism, a much more dynamic and realistic model of human behavior,

        Really ? Does that means I can own my own sovereign money as an individual ??? Sign me up !

      6. Michael+Glenn No I’m not a Socialist, I’m just not a soulless evolutionary dead end.

      7. Good to hear. I hope you support the monetary approach of debt-free trades supported by personally owned debt-free market based money in that case ? It dovetails amazingly well with what’s in place now in the way of legal tender.

        The stage is set to add the “monetary Yang to the Yin” as a process to completion. That has to come from the free market.

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