The overriding question on the Federal Reserve is: “What should we do with this intruder that seized the House of Representatives’ constitutional duty to create money and regulate its value?” As AFP reported on page 2 in its Oct. 25, 2010 edition (No. 43), several commentators and activists, at this 100-year mark since the Fed’s initial conception on Jekyll Island, are considering how to operate in the post-Fed years.
AFP has focused extensively on monetary reform, finding that there are two schools of thought on what to do with the Federal Reserve System: Nationalize it, which may preserve some of its components; or dissolve it, leaving nothing behind.
Mickey Paoletta, who heads the Citizens Reform Center that teaches about banking and debt, was especially firm when contacted by AFP.
“My view is that it should be abolished—every square inch,” he said. “Get Congress to instead create a [public] monetary commission that directly reports to the House.” He clarified that the federal government, instead of borrowing money from private bankers at interest, would create its own money directly interest-free—“at plus or minus 3 percent of the gross national product.” That commission would oversee the government’s money creation.
The money supply in this scenario, according to Paoletta, would be “inflationproof” since care would be taken to make sure the supply does not outpace the quantity of goods and services to a degree that would trigger monetary inflation.
Venturing into the parallel question of whether a world without the Fed would include a gold standard, Paoletta stated, “They control the gold,” referring to the global banking cartel’s ability to meddle with the supply and value of gold that would back the currency.
American Monetary Institute (AMI) leader Steven Zarlenga has told AFP on more than one occasion that nationalization is the way to go. He once said that nationalization is essentially the same as “ending” the Fed. Annual End the Fed rallies started across the country in November 2008.An actual end the Fed bill (HR 2755) was brought forth earlier in 2008 but died for lack of congressional cosponsors. Different versions of bills to simply audit the Fed soon followed. Finally, a limited Fed audit made it into a 2010 Wall Street reform bill that Obama did sign into law.
Former Michigan U.S. Taxpayers Party chairman Dennis James said that, with nationalization, “You could end up with the same thing with a different name.”
The idea of nationalizing the Fed has a certain “slickness” about it that he finds troubling.
Paoletta warned that, conceivably, the Fed’s Board of Governors, the creation of which was a small compromise by the Fed’s founders to win public confidence in the early days, would stay intact under nationalization. Regarding the Fed’s fate, former AFP staffer Tony Blizzard, responding to a query, replied that only government should create money—and stop there. “[Keep] government out of the banking business and banking out of the money-creation business,” he said. As for either nationalizing or dissolving the Fed, Blizzard responded, “Neither. Let it continue to operate but only as a common bank with new rules.When either the government or the banks have the ability to both create money and loan it, you are asking for the trouble we have today.”
But Paoletta said that nationalization means the Fed, although presumably weakened, “would become part of the government.” He views this option as too risky because “the monster” still lives.
Yves Jacques, a social credit monetary reform advocate, called nationalization “a smokescreen,” adding, “The U.S. would just own the building with the same old people (private bankers) doing the same thing. Every time they talk about nationalizing the banks, the money supply is still not put in the service of the people. The money belongs to the people; government is only supposed to be the steward.”
A fall 2010 article in the independent British newspaper, the UK Column, noted that the private Bank of England, established in 1694, was “nationalized” in 1946. “The bank lost some of its operational independence, with regard to monetary policy, but it still continued to operate as an independent commercial bank with customers other than the British government. In 1998, its full independence was returned to it,” the Column explained. The Bank of England “still operates in secret”—and has other commercial interests such as heads of state and foreign governments—“as it always has,” the Column continued. “It is not accountable to the taxpayer in any way.”
Mark Anderson is a longtime newsman now working as the deputy editor for American Free Press. Together he and his wife Angie provide many photographs of the events they cover for AFP. Mark welcomes your comments and inputs as well as story leads. Email him at at firstname.lastname@example.org.
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