from Bill Still
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Last Monday, Donald Trump went on CNN and said the most forbidden words in the language of American economics:
“You never have to default because you [can] print the money.”
You notice I put “can” in brackets which means he didn’t say that, exactly, but he meant to say it.
But now let’s hear exactly what he did say:
[insert CNN]
It’s true; for a nation which has retained the money power as an essential ingredient to its sovereignty, default is never necessary.
That’s one of the main problems with the EU and its Euro.
Nation states completely lose the power over controlling their money.
However, to an American-trained economist – printing money is the worst of heretical notions. Why? Because they believe that it will surely lead to hyperinflation – Zimbabwe – scenarios.
However, according to my friend, Prof. Steve Hanke of Johns Hopkins University, there have been less than 50 hyperinflations in world history, yet hundreds of incidences of deflations – better known as depressions.
Hyperinflations are the rare exception in economic history, never the rule.
At the root of this argument is who should control the quantity of money in a sovereign nation.
There are only two alternatives: #1 the sovereign nation state, or #2 the banks.
The truth about our economy is 97% of the U.S. money supply is created by banks – only 3% is actually created by the government.
How do banks create money? When a bank makes a loan they only have 10% of the money, the rest they have the legal right to just simply make up out of thin air – and then charge us interest on it!
However, the U.S. Constitution only gives the money power to the people, through their elected representatives in Congress.
In fact, so basic is the power to control the nation’s money, that it was the primary reason America fought for its freedom against the British – for the freedom to create its own money.
So why should we even allow a national debt?
We shouldn’t – in fact no government that claims to be sovereign should allow it.
Why should a government borrow money from banks when it has a duty to create it without the interest – or control – that borrowing brings?
Do you know how much interest we pay on the national debt today? It’s about 450 billion dollars a year. This is insanity!
This entire national debt crisis is a total flim-flam job perpetrated on the American people to keep this steady stream of debt income flowing to the banks – the biggest of all big corporations.
So, simply by using the phrase “we can print our money”, Trump is letting the cat out of the bag that there is another way to get out of this economic mess that not only America is in, but virtually every other nation as well.
The good news for President Trump is there are many good alternatives for ending the national debt – which is the essential first step in preventing a future economic collapse.
My old friend Ellen Brown summarized several alternatives in an article she published last week – probably her most succinct and impactful article to date.
http://www.truthdig.com/report/item/p…
I won’t step on her article by rephrasing it, but I will add another solution that I believe gives us the most bang for our buck while minimizing the risk of upsetting economic systems and markets, which traditionally hate uncertainty.
I say pay down the National Debt using America’s oldest form of paper money, U.S. Notes – as opposed to Federal Reserve Notes.
U.S. Notes came into being at the hands of Abraham Lincoln to allow him to win the civil war.
It was money issued by the government for the benefit of all, as opposed to Bank Note money – issued by the banks, which only benefit the banking corporations.
These red-sealed dollar bills are still a valid form of currency in the United States.
However, since no new notes have been issued since 1971, they are increasingly rare to find in circulation.
So, the solution to America’s debt problem is very simple, reissue U.S. notes and pay off the National Debt.
However flooding the market with 20 trillion dollars worth of U.S. Notes would be inflationary. So guess what? We won’t do it the stupid way. We’ll do it the smart way – gradually introduce them as the debt comes due over a period of years.
Fortunately for Mr. Trump the vast majority of our national debt comes due in less than 8 years – two terms of the presidency.
Approximately 54% of this debt must be paid in 3 years or less.
So, yes, it’s true. President Trump could actually pay off about 54% of our National Debt it his first 3 years in office – by paying it off in U.S. Notes or their electronic equivalents?