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Five serious defects in our Money and Banking System -- and How To Fix Them ...

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These defects need correcting as soon as possible if we are to realize the potential of our enormous wealth.

1) Hardly anyone understands Money and Banking and it certainly looks like the Federal Reserve likes it that way. This lack of understanding is based on dis-information and mis-information that has been consistently spread for almost 100 years now -- since Congress wimped-out and passed their Constitutional duty to Create Money and Regulate the value thereof to The Fed. WE MUST START AN AGGRESSIVE EDUCATIONAL PROGRAM.

2) Our government borrows money regularly every day, in spite of the fact that it has the Sovereign Right to create whatever money it needs to meet the needs of our country and thereby save the $400 Billion Dollars in interest we pay to creditors every year. Why are they borrowing money when they can create it at no cost? See: Abraham Lincoln's Monetary Policy
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3) Many serious people think that creating money always causes inflation. That is totally bogus. If the government lends newly created money to people who have good collateral and who will use that loan to create more wealth than the dollar-value of the loan -- the created money will not create inflation. When they pay the loan back, the debt is canceled, and the wealth remains behind -- making us all wealthier. WE MUST START AN AGGRESSIVE EDUCATIONAL PROGRAM. We believe this needs no link or further argument -- it is self evident.

4) We believe the collapse of the Money and Banking System of 2007, 2008. 2009 and continuing ... was started directly by allowing lending banks to sell off their questionable mortgage loans to investment bankers, led by Freddie Mac and Fannie Mae, who bundled them into incomprehensible financial instruments that nobody understood, but apparently everyone bought and regretted. Without that selling-off of loans -- the collapse would not have started, because there would have been no pie-in-the-sky fuel for the firestorm that came very close to destroying our economy. WE MUST START AN AGGRESSIVE EDUCATIONAL PROGRAM. We believe this needs no link or further argument -- it is self evident.

5) We must start keeping our national books in accordance with a Generally Accepted Accounting Principles (GAAP) and a double-entry bookkeeping system that (a) keeps accurate records of income, expense, assets and liabilities and (b) depreciates assets on a realistic depreciation schedule. Until that is done, we will never understand where we are financially and will be constantly overestimating our national losses. Every major business in the world follows these rules -- why not the government? WE MUST START AN AGGRESSIVE EDUCATIONAL PROGRAM. We believe this needs no link or further argument -- it is self evident.

The following is from:
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"Fix our Money and Banking System by the establishment of Community Banks working together as a Sovereign System of Banking"

This plan provides for the establishment of 4,000 Community banks (Bank) -- one in each community area of about 75,000 people.

(2) Each Bank will be given a State Charter which will spell out, in some detail, what that Bank will be doing. For the most part, at the beginning of this program all Banks will focus on placing 4%, 30-year
mortgages on single-family, owner-occupied homes wherein the owners have put down 20% of the purchase price as a down payment and have sufficient verified income such that the mortgage payment will not exceed a to-be determined percentage of that verified income (probably between 20 and 30%).

(3) All levels of government (see #5 below) will be involved in this plan in a very simple arrangement that will thereby serve to naturally provide the checks and balances that are inherent in the Constitution.

(4) Those checks and balances are missing from our existing banking system that is essentially run by the Federal Reserve System that is outside any of the branches of government established by the

(5) Participants in the new Money and Banking system and what they will do:
Legislative Branch of the Federal Government: Will pass laws telling how the money and banking system will operate.
(b) Executive Branch of the Federal Government: Will manage the money and banking system in accordance with laws which will be passed by Congress.
(c) The Federal Reserve System: Will be put into the Executive Branch of the Federal Government and will work in concert with the Treasury Department of the Executive Branch and renamed "The Sovereign Bank of the United States". If the Federal Reserve System or any existing individual bank does not want to operate in this way -- it can liquidate its assets by trading them for Government bonds, dollar for dollar.
(d) The 50 States: Will, in contractual agreements with Local Governments, set the terms of the charters which will specify, for each bank, which specific duties the Community Banks will perform and the rules under which the banks will operate. The new "Sovereign Banking System" will have, as a minimum, all the money creating rights given in the Constitution to Congress.
(e) Local Governments: Will manage the Community Banks with government employees who will work only for the banks.
6) Banks will be extremely narrow -- no deposits will be accepted. That will cut overhead to an absolute minimum. Deposits will be handled separately by a system of "Saving Banks" that will handle only (a) savings accounts and (b) the sale of 6% government bonds to citizens who will use these accounts and bonds to save money for whatever they value -- including (a) college educations (b) living expenses after retirement and (c) catastrophic health care insurance. This will take an enormous load off the back of our government

7) There are 50 million owner-occupied homes in the country.
8) There are 300 million people in the country.
9) 20 million homes will be covered by these 4% mortgage loans.
10) There will be 4,000 banks -- one for every community-area of 75,000 people.
11) The loans will cover only owner-occupied homes.
12) Owners must have a 20% down payment. That money can come from money supplied by private citizens or charities that will hold second mortgages on the homes involved.
13) Mortgage payments must not exceed 20 % of family income from all sources.
14) The average loan on each home will be $100,000.
15) Each Bank will issue and hold 5,000 mortgages. A total of $500 million/ Bank.
16) Assume $50 million capital for each bank. This can come from any source, preferably local people. Investors will be given a 6% return (dividend) on their investment. That will result in a dividend payout of $3 million / year. That will reduce bank profit to $16.5 million / year. If the $50 million can't be raised easily, the money can be advanced by the Sovereign System of Banking and paid back at the rate of 6% / year
17) INCOME PER LOAN: -- For each Bank, there will be a Bank income of $4,000 / year on mortgage income per home.
18) TOTAL INCOME PER BANK: -- Each bank's mortgage income will therefore be $20 million / year. (5,000 mortgages -- each returning $4,000 / year).
19) Each Bank will operate with 4 employees.
20) Bank payroll will average $80,000 / year per employee. Maximum amount per employee -- $100,000. Minimum -- $60,000
21) Total payroll wil be $320,000 / bank / year. ( #19 times #20)
22) Insurance, overhead and whatever / employee will be 50% of pay. That will add to $160,000 / bank / year.
23) Floor space will be 400 square feet / bank. Can be in any existing government facility.
24) Rent, utilities and overhead will be $12 / per square foot / year or $5,000 / bank / year.
25) Total expenses / bank / year will be:
(a) Employees -- $320,000 (from #21 above) + $160,000 (from #22 above) or $480,000 total.
(b) Space -- $5,000 / year ( from #23 above)
(c) Total -- $485,000 / year -- adding (a) & (b) -- round to $500,000
26) Profit / bank / year --
(a) Income -- $20 million (from #18 above), minus c & d below
(b) Expenses -- $1/2 million (from # 25c above)
(c) Dividends -- $3 million (from #16 above)
(d) Total profit -- $16.5 million / bank. That is a 33% return on the invested capital of $50 million.
27) Total profit for entire system of 4,000 banks -- $78 billion / year.
28) That is $78 billion / year profit total for all 20 million homes.
29) That profit can be spent by the community for any general common good spelled out in the Bank's Charter.

Martin R. Carbone / Google me to find my website and email address.


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Martin Carbone Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Retired engineer, product and business developer, inventor (six patents). Currently (a) trying to completely understand our money and banking systems and (b) planning to pass that information to the American public. Photo is ca. (more...)
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