There is no question about the federal reserve which does not eventually lead
to the demise of the system and the need to replace it with another system for the
well being of the economy and the country. Along with this reality comes the real
question and that is what should replace it and the coinciding question about how
it is to be accomplished.
The following nine points should be considered when replacing the Federal Reserve:
First, it would be entirely transparent. The only reason for secrecy is to hide something.
An efficient system working in the public’s best interest would have nothing to hide
and its administrators would have nothing to fear.
Second, it would be fair, sustainable and create an environment of prosperity for
all. Numerous non-interest bearing systems at the federal and state level have been
shown to be mathematically sound and would produce economies that were both sustainable
Third, it would not be based on debt with interest (Usury); certainly at the Federal
level. Other systems go further and propose non-interest bearing systems throughout
the entire financial system. This requirement is based upon the knowledge that any
system that operates under a Usury principle is unworkable since it can be shown
to be mathematically unsustainable.
Fourth, it would have sufficient regulatory and audit controls built in that would
identify any irregularities quickly and decisively and identify those responsible
for the problem.
Fifth, it would prohibit the practice of debt backed money at the federal level,
returning the power of money creation to a new department of the Federal Government
(We the People) established by Congress as enumerated by the U.S. Constitution Article
I Section 8.
Sixth, it would eliminate excessive or “toxic” debt and derivatives from the entire
financial system, and restructure balance sheets to produce workable debt to income
ratios. This could be accomplished by several mechanisms:
Individuals and businesses could be credited with, or receive a refund of tax dollars
or recover interest payments that would be used to directly pay down existing debt.
All banks and financial institutions could be reorganized through a special bankruptcy
procedure to eliminate unserviceable debt and derivatives. All banks will survive
this process and will exit their bankruptcy with 10 to 1 fractional reserve ability,
a level of leverage that is safe and will be capped by law.
State balance sheets would be restructured and all states would create State Chartered
Banks based on the successful model of the Bank of North Dakota. Additionally, these
banks would assume the roles and functions formerly held by the 12 Regional Federal
Reserve banks, thus decentralizing control but in a coordinated manner where all
states would benefit proportionately and fairly. These State Chartered Banks would
oversee and regulate the banking operations of the local banks operating within their
What is the Federal Reserve?
If one were to listen to the government or the Federal Reserve it would seem that
the Federal Reserve is the fix for all economic woo’s and is this benevolent organization
to support economic growth and currency stabilization. It was initially formed to
provide maximum employment, stable prices, and moderate long-term interest rates
and today includes conducting the nation's monetary policy, supervising and regulating
banking institutions, maintaining the stability of the financial system and providing
financial services to depository institutions, the U.S. government, and foreign official
In reality it has never accomplished the tasks it was created to supposedly control.
In fact it has probably contributed to provide more severe boom and bust economic
periods than it has prevented.
Having the monetary system being based on debt and creating money out of thin
air means that eventually the monetary system must collapse.
By looking at the financial crisis in countries such as Greece, Cyprus, Spain
and Italy just to name a few it can be seen that centralized banking based on nothing
but debt creates nothing but financial ruin for countries and individuals. Central
banking has demonstrated that it is a flawed system when it was tried in the 1600’s
, 1700’s, 1800’s and now in the 2000’s is collapsing again and demonstrating that
it is not sustainable.