How we can reform the money and bank system to save America

13- The fiscal systems operate on a much more diversified basis. There are many governments— federal, county, and city. In those governments, there are many delivery systems—military, police, fire, Medicare, Social Security, education, and welfare, both social and corporate. Why shouldn’t new money be more diversified?

14. Credit risk formulas and models currently used by the private commercial banks, which are inherently flawed, will be reduced because some of new money distribution is moved to other
private distribution systems and the government. Continuing to improve and increase regulation and risk models helps, but it is not the answer! Reckless lending will be scattered and there will be fewer defaults, especially with the use of an equity component rather than all debt

A key element in the art of monetary policy is coping with change. The current most important change is accelerating globalization. Again, with more transparency and decision-making based on the volume of money created using diversified distribution systems, it will be easier and safer to cope with changecreated using diversified distribution systems, it will be easier and safer to cope with change16. We need transparency and diversity to reduce the negative effects of excessive greed17.

The central banks attempt to have many regulations and capital requirements in order to offset factors of self-interest and other human frailties. But with the delivery basically in one system with reduced transparency, any errors that do get through are certainly overly accentuating thenegatives, i.e., sub-prime mortgages18. Our single, private, commercial banking system is less and less willing to share risk.

It has lost the ability to foster the development of novel or non-standardized risky, private enterprise. This means that economic development slows and future generations are disadvantaged19. Banking crises will not be as detrimental to the overall economy and other financial systems because these crises will not be as severe or as influential in the monetary-financial sector. Consequently, human hardships will be greatly reducednot be as severe or as influential in the monetary-financial sector. Consequently, human hardships will be greatly reduced20.

Diversification reduces the “herd behavior” of financial institutions and investors in whatever country or market is fashionable at the moment. Herd behavior can lead into excessive bank lending and over borrowing within a particular industry, country, or group of countries21. Diversification will make the repeal of the Glass-Steagall Act less important as the power tocontrol large quantities of new money will be lessened, reducing the ability of the commercial banks to lend to their investment banks (trading departments) which control and manipulate markets.

It will also reduce the amounts that can be invested in risky options and derivatives substantially reducing risk to the entire banking system22. The current system charges excessive interest (usury) and unfairly transfers income from investors, workers, and owners to the banking sector, resulting in a lower level of production and investment to the detriment of the economy. Removing the monetary creation process from the banks and increasing the diversity of distribution provides more support for the real economy (Main Street) rather than the financial sector (Wall Street). It also increases competition and reduces inequality.

This means that the monetary system funds new means of production, not just collateral-based lendinglower level of production and investment to the detriment of the economy. Removing the monetary creation process from the banks and increasing the diversity of distribution provides more support for the real economy (Main Street) rather than the financial sector (Wall Street). It also increases competition and reduces inequality.

This means that the monetary system funds new means of production, not just collateral-based lending23. Reduction of the tax burdenon a vast majority of the population. This is a direct result of paying for some federal government programs with newly created dollars. A diversification of systems will infuse more money into the economy, resulting in an expansive economy, causing greater total tax revenues with lower tax rates except for the top 1%24.

Having the monetary system providing for some spending programs substantially reduces the political fiscal pressures of balancing budgetsbalancing budgetsIf all the debt and interesthad to be paid off at once,there would not be enough money in circulation because the current money-debt system does not create the compounding interest charges, but only the principle. Since it does not have to be paid off at once, there is enough money in circulation to pay interest, but it does create unnecessary scarcity that causes hardships, conflicts, and additional borrowings to pay the debt service.

This limits growth by forcing the economy tokeep borrowing in order to pay the interest charges. This is the main reason that the banking system is unsustainable. It is impossible to pay back because there is not enough money to do so, thus causing the system to collapse26. Because the government borrows money instead of creating it at no cost, it has to tax future income to pay its debt service to the financial class. This tax is an expense adding to the break-even cost of doing business and increases taxes to the populace27. What stops the bank-led financial system from expanding credit and money without limit, including to their owned investment banking side? The obvious answer would be that it would stop when participants ran out of profitable opportunities. But this is not a convincing answer if the activities of the hyperactive intermediaries in aggregate create the perceived opportunities: credit growth breeds asset price bubbles that in turn breed credit growth.

What stops it, is a crisis or collapse of the market used for collateral such as the 2008 mortgage crisissystem from expanding credit and money without limit, including to their owned investment banking side? The obvious answer would be that it would stop when participants ran out of profitable opportunities. But this is not a convincing answer if the activities of the hyperactive intermediaries in aggregate create the perceived opportunities: credit growth breeds asset price bubbles that in turn breed credit growth.

What stops it, is a crisis or collapse of the market used for collateral such as the 2008 mortgage crisis28. Banks are profit-seeking, risktaking financial institutions. One’s money is at risk except for the insured amount. Therefore, they should not have the power to create money, but to only distribute it29. Monetary reform will reduce the financialization of the American economic system. This means the economy is stimulated by the shift from making things to the manipulation of money, which involves: derivatives, mergers and acquisitions, venture capitalism, leverage buyouts, workouts and turnarounds, currency speculation, and arbitrage. One of the reasons for this excess is the creation power attached to the banking sector. The monetary system becomes the servant and not the master of the economy, as it is now!

Permanent increases in the money supply only come when there is a write down or total failure to repay a bank loan. Is bankruptcy an appropriate way of having permanent money for our economy? Of course not!

We believe we have listed more than enough reasons, over two dozen, to support the elimination of money creation by commercial bank lending. We need to create a transparent monetary creation system based on volume in circulation and inflation statistics with multiple delivery systems. The proposed system is created to handle human errors, which is not the current single banking system that is based on attaining human perfection through regulations.
If you do not get a clear understanding and you are not persuaded by my reasoning, you can do further reading and research. Therefore, to assist you further in your education and comprehension, I have prepared an extensive list of website addresses and books to read below.