I reject the argument that this would lead inevitably to another Great Depression, though that is a topic for another article.
I have looked at the Bank of North Dakota's balance sheet. Their loan portfolio
is less than either their assets or
their deposits. This is still fractional reserve banking in letter, but
maybe not in fact.
This is an important distinction I was unable to impress upon Zarlenga in our
post-lecture dinner conversation.
So, I endorse the limited, BND-type model of State Banking, but certainly not a
government imprimatur on MLI Goldman Sachs (which, actually, they have already since
being allowed to become a bank-holding company, eligible for bailouts). I
don't think this is threading the needle too finely. You can ride a
horse, but not a shark, though both are animals.
I also endorse the AMA, but only with a LVT to check speculation and provide
revenues.
I like Ron Paul. He is a Maverick. Paul is consistent in his views on monetary reform. Alas, he is consistently wrong.
Paul wants the country to return to the Gold Standard, and as next in line to
head the powerful Banking Committee, with his son, Rand, possibly as another
member, he just might get his way. As Zarlenga has proven in "The
Lost Science of Money" (TLSoM) commodity-based money is a recipe for
deflation and depression, as the supply of precious metals is never enough for
society's expanding need for money. (I also find myself worrying along the same
lines as Brown that even Zarlenga's money-from-Congress solution would not
produce enough money either, but it is still better than commodity-based
money). Wherever it's been tried,
gold-backed money has led to a shortage of the metal, depression, and even
collapse (See TLSoM on Rome's final collapse etc.). And the situation is
even worse today, when fully 1/7th of the gold volume traded, according to
Business Week, is in ETFs, where physical gold is not even delivered to the
traders - and sometimes,
alarmingly, not even to the ETF! The tools to manipulate the market in
gold exist on a scale that would have made Midas blush. Certainly, this commodity,
increasingly in short supply, is the last kind of thing one wants to base their
money upon!
So, we have to watch and maybe protest Ron Paul's appointment to the head of
the banking committee (see the December 9th edition of Business Week
for more information: http://www.businessweek.com/news/2010-12-09/ron-paul-author-of-end-the-fed-to-lead-fed-panel.html),
not only about his Goldbuginess, but also over his endorsement of the Austrian
school and scarcity models of economics.
People seem to flock to him in response to his promising to end the wars and lower taxes, without seeing the specifics of his monetary policy, and that's what counts right now.
Update
Congressman Dennis Kucinich has just introduced the N.E.E.D. Act, which is essentially Stephen Zarlenga's American Monetary Act. It's worth reading the act, supporting it, and writing to Kucinich and your own congressman in support. I will still not feel the act is complete without a Land Value Tax, but this is a great start in putting money back in the hands of the people, not the bankers.
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