Money as Debt II Promises Unleashed (6 of 8)

In the latest twist to the California budget saga, Citigroup, Wells Fargo, and JPMorgan Chase (which each got $25 billion in bailout cash from the taxpayers) and Bank of America (which got $15 billion) have refused California’s request for a loan to tide it over until October. Until the State may get things sorted out, it has started paying it is creditors in IOUs (“I Owe You’s” or promises to remunerate bearing interest, technically called registered warrants). Its Wall Street creditors, however, have refused to take them. Why? The pot says the kettle is a poor credit risk!

California expects to need to issue only in regards to $13 billion in IOUs through September, and all it is Governor has asked for in the way of a loan from the federal government is a guarantee for $6 billion. Total loans, commitments and warrants to rescue the financial sector and stem the credit crisis have been approximated at $12.8 trillion. But California has not been invited to the banquet. The total sum California needs to remainder it is budget is $26.3 billion. That is regarding the same sum given to Citigroup, Wells Fargo and JPMorgan in bailout money; and it is only with regards to one-tenth the sum given to AIG, a mere insurance company. Corporations plainly trump States and their citizens in the eyes of the powers controlling the purse strings. California has a gross domestic product of $1.7 trillion yearly and has been ranked the world’s eighth biggest economy. Its 38.3 million humans are one-eighth of the nation’s population and a key catalyst for U.S. syndication sales. When the California buyer base falters, businesses are shaken nationwide. If AIG and the other Wall Street welfare recipients are too big to fail, California is way too big to fail.

Fitch Rating Agency has downgraded California’s municipal bonds to junk bond status B triple B. Why? AIG and Lehman Brothers had A ratings right up until they declared bankruptcy. California has never defaulted on it is bonds, and it can not arbitrarily determine to default; the State Constitution mandates that debt crucial and interest ought to be salaried as promised. California bonds lost their triple A rating only when the municipal bond insurers (Ambac and MBIA) lost theirs. It was these insurers, not the State of California, that got into hot water gambling in derivatives. The State Attorney General has opined that California’s IOUs are valid and binding obligations of the State. In rejecting them, however, Wall Street may have ulterior motives. A lower credit rating may warrant investors in demanding higher interest rates. The interest offered on the IOUs is substantially lower than the interest banks may get on triple B ranked municipal bonds.

There may be deeper motivatings than that. Considering the enormous importance of the California economy to the country, and the comparatively little sum it needs in loans, the refusal to support the State financially seems highly suspicious, exceptionally when much more has been given to less creditworthy private institutions. The banks say they want to keep the pressure on California legislators to work it out amidst themselves, but what does that mean? The choices are even higher taxes, even more cuts in services, or even more fire sales of public assets; in short, the sort of austerity measures expected of supplicants scaled down to Third World debtor status. State legislators are understandably reluctant to creep into that debt pit. Governor Schwarzenegger has refused to approve higher taxes, while Democratic leaders say further cuts in services could leave a lot of Californians starving in the streets.

THE SUN COULD SHINE AGAIN ON THE SUNSHINE STATE

There is an substitute to that dark future, and perhaps it is to keep the public from waking up to it that arms are being twisted to receive the new burdens quickly. If Wall Street and the Feds won’t extend credit to California on reasonable terms, the State could merely walk away and give rise to it is own credit machine. California could put it is revenues in it is own state-owned bank and fan these “reserves” into a lot of times their face value in loans, using the same “fractional reserve” system that private banks use. Many authorities have attested that banks merely develop the cash they lend on their books. Congressman Jerry Voorhis, writing in 1973, explained it like this:

“[F]or each $1 or $1.50 which persons B or the government B deposit in a bank, the banking system may formulate out of thin air and by the stroke of a pen a lot of $10 of checkbook cash or demand deposits. It may lend all that $10 into circulation at interest just so long as it has the $1 or a little more in reserve to back it up.”

If private banks may leverage deposits into multiple amounts of “credit” on their books, a state-owned bank could do the same thing — and return the profits to the public purse. One State already does this. North Dakota boasts the only state-owned bank in the nation. It is likewise one of only two states (along with Montana) that are presently capable to meet their budgets. The Bank of North Dakota was established by the legislature in 1919 to free farmers and little businessmen from the clutches of out-of-state bankers and railroad men. By law, the State must deposit all it is funds in the bank, and the State warrantees it is deposits. The bank’s surplus profits are returned to the State’s coffers. The bank operates as a bankers’ bank, partnering with private banks to lend cash to farmers, real estate developers, schools and little businesses. It makes 1% loans to startup farms, has a thriving student loan business, and purchases municipal bonds from public institutions.

North Dakota is not suffering from jobless or sentiment the pinch of the economic downturn. Rather, it sports the biggest surplus it has ever had. If this apart farming State may escape Wall Street’s credit crisis, the world’s eighth greatest economy may do it too!

Money As Debt Ii Promises Unleashed 6 Of 8

Pop quiz! Where does cash come from? Who makes it? What is inflation? What is the Federal Reserve? Why is America so buried in debt? Unsure how to answer such questions? Then you genuinely can’t afford to miss this book. The fact is that while most humans waste away their lives attempting to get money, very few people actually know what cash is in the modern world. And what cash is in the innovative world is not one thing but debt. Through the support of the accessible style of an illustrated prose comic book, DISSOLVING DOLLARS will take you on an intriguing, eye-opening journeying through American history, banking, and progressed money. You’ll discover the scandalous truth when it comes to inflation, debt, interest, the Federal Reserve, banks, taxation, bailouts, economic growth, the creation of money, and much more. You’ll also discover number of things from which only one can be chosen to the current mess, such as replacing Federal Reserve Notes with infrastructure dollars. Overall, DISSOLVING DOLLARS is an magnificent book for any individual wanting an easy entry point to understanding the unfeigned nature of modern money. So get the inside story today. Your dollars depend on it! For more selective information go to www.dissolvingdollars.com Book modified June 2011.

Money As Debt Ii Promises Unleashed 6 Of 8 Pic

Money As Debt Ii Promises Unleashed 6 Of 8 Image

Money As Debt Ii Promises Unleashed 6 Of 8 Picture

Money As Debt Ii Promises Unleashed 6 Of 8 Image

Most helpful client reviews

6 of 6 humans found the following review helpful.
Revamp your economic paradigm!
By Coury Ditch
This amazing book is a will have to have for everyone who uses money! We spend all of our lives chasing money, but do we even know what cash is? How it is made? Who makes it? The history of money? All these questions and some more are answered within this comically aesthetic and concise rendition of monetary explanation.

It have a tendancy to be an aroused ride as well, full of passion, inspiration, anger, depression, and hope. Unlike most other railings versus our parasitic system, this one includes progressed designs for new economic systems.

I purchased one copy the night it was freed (big fan of theuniverseas.com) and read it over thanksgiving break. It was so good, I purchased 5 more copies for Christmas and handed them out to friends and family. My Mom is loving it so far, she is astonished by the veil of deception that has burned by the data in this book. I even gave this to the president of a fed chartered local multi-branch bank in my town, I am excessively affected emotionally to listen his reaction.

Let monetary enlightenment take hold of the 21st century; any crusade may create change, the ripple effect shall pervade the collective.

Thanks so much Alex!

3 of 3 persons found the following review helpful.
A must read!!
By Roderick P. Aquino
Finally the real truth when it comes to our US monetary policy. The Federal Reserve is a Centralized Bank controlled by private investers and alien governments. We are debit based economy manipulated and financed by the Centralized Banking system. We must abolish the Federal Reserve (centralized bank) and go back to Able Lincoln’s “Greenback policy”
The US government issues it own cash and controls the cash supply. Eliminate borrowing from the Federal Reserve, recompense off our alien debit, as a result, lower taxes would be required,increasing person wealth. It is time we Americans take control of our Money Policy, not alien powers.!!! The book is an easy read. The comic book format explains the complex US Banking system effortlessly understood by the reader. I purchased assorted copies and pasted out to my friends. It is essential our youth get involved in altering our Monetary poicy.

2 of 2 people found the following review helpful.
Great little book!
By Laurie J. Limbach
I may highly commend reading DISSOLVING DOLLARS for any individual attempting to make sense of the current (and past) financial difficultnesses our USA has, much of which stems from dishonest banking practices. Marchand writes an easy-to-read expose citing examples of how our current system just does not work and gives practical ideas to remedy the situation. The book reads fast (not heavy) and is illustrated throughout. I intend to buy the second edition which is now available, and even extra for gifts!

See all 5 client reviews…