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Guns and Butter - October 24, 2012 at 1:00pm

Guns and Butter, for October 24, 2012 - 1:00pm

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Guns and Butter

"Restoring Prosperity With Public Banking" with Ellen Hodgson Brown. The Public Banking Institute; public versus private banking; two banking models – sustainable and extractive; the Federal Reserve; the shadow banking system; the repo market; the benefits of a public banking system; debt; the money supply, compound interest; and all things money.

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Ellen dear, and dear Bonnie,

Ellen dear, and dear Bonnie, I found this interview so stirring that I have decided to transcribe it and post it on my website, at

I am convinced that this is the key to open the prison house and set us free!

See my whole site at

Jeff Strahl, your articles

Jeff Strahl, your articles contain no relevant article arguments whatsoever simply claiming accounting is wrong because it is circular and citing the slavery loving Aristotle as if he right about anything.

The basic problem is that false assume that "basic nature of exchange, which tends towards the exchange of equal values" i.e. equilibrium. I'm afraid that contradicts every empirical observation about exchanges which is they done for the purpose of increasing future value not equalizing with any fixed values of past labor.

It's amazing that folks still cite imperialist agents like Marx in order to trying and ignore the finance power at the top and blame the crisis on the middle class and "over production" of industry etc... blame everything but elite corruption.

Ellen Brown said we need more

Ellen Brown said we need more money in the economy, so she is in favor of QE, just not the way the Fed has been doing it. We do NOT need more money. We need more WEALTH. Putting more money into the economy, without a proportional increase in wealth, only causes prices to go up and savings to be destroyed.

So the solution is to find ways to generate more wealth, not more money. But that is a longer term solution. It would seem even Ellen Brown and her ilk are in favor of the quick-fix solutions, which, of course, don't really fix anything. Behind every dollar, there must be actual work/wealth not just a promise to pay.

QE doesn't add more money to

QE doesn't add more money to the economy rather the opposite due to loss of interest income. It is an asset exchange removing one kind of asset and replacing it with bank reserves with by definition are held in reserve and don't go anywhere.

You can't grow real wealth ( see Schumpeter) without credit expansion and monetary savings in a capitalist economy so in order to increase net private sector holdings in dollars to create the basis for new investment the public sector must increase it's deficit position by spending.

Don't buy this oligarch line about a fiscal cliff.

If you can destroy a thing by

If you can destroy a thing by not understanding it, Jack Straw does a great job. MMT has it's own problems with EHB, but digging deeper into both is warranted.

This program pointed out that

This program pointed out that abusive interest policies and foreclosures/property takeovers during 'boom/bust' cycles perpetrated by privately-owned banks are responsible for a significant portion of economic problems. The comment above is disingenuous inasfar as all banks, including privately owned for-profit corporations and the privately owned member banks of the Federal Reserve 'create' money by granting credit while monies from depositors are still held by the banks.

Furthermore most depositors and/or businesses and individuals who have or seek loans would be most interested to know the rates banks are able to borrow: .01 to .07%!

This program is worth anyone's while and includes information about a non-profit organization that is working to advocate publicly-owned banks for states so that interest on loans goes to support the services and infrastructure that current abusive private banks claim to be unaffordable.

Ellen Brown claimed that the

Ellen Brown claimed that the BRIC nations, which all have government-owned central banks, grew 92% over the last decade, to support her claim that such a bank is a solution to the present crisis. If one searches the Web for such information, the only thing which comes up close to it is that stock markets in "developing markets" went up 92% during the first decade of this century. In terms of growth rates, the picture is quite different. China did grow at a 10% annual rate for a while, but it's down to 7.4%, with other stats calling even this figure into doubt. Given China's situation of people leaving the rural areas in search of jobs, a growth rate under 8% is really bad. India's GDP's rate is down to 5.3%, even more of a problem, and its international indebtedness is worsening by the day.
Via Trending Economics dot com: Brazil's growth rate 1996-2012 was .76% annually, it's down to just over 1%. Russia's rate 2003-12 was 1.76% annually, likewise in crisis.
Brown provided Japan as another example of the positive influence of public banks, claiming its low growth rate nonetheless has not prevented some of its key industries from remaining near the top. You can thank exports to China for that, and these are diving as China slows down. Japan is so broke it is unable to do anything about the on-going Fukushima disaster. For info on Japan and the BRICS, you can also see and
Brown thinks the solution is to have a public bank which will "print" money (create it out of thin air on the computer) and pretend that it can be used to purchase all outstanding debts, with no consequences. This is Modern Money Theory, which is effectively shredded at which discusses the deeper crisis at play.
The global crisis originates within the very structure of capitalism. Monetary policies pursued by individual nations does nothing to deal with this basic crisis, it simply moves the worst effects from one nation to another. During the 1930s, such policies provided temporary relief, but only to buy enough time till the nations could pursue currency/trade wars which eventually morphed into a global war. In 2012, the relief time such policies can buy is much, much shorter. Brown's analysis is actually not analysis at all, but pretense.

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