Let me tell you about negative interest rates
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oldickeastman
Jun 8, 2014, 10:00:11 PM6/8/14
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Negative Interest Rates -- what they are; what they can't do; what they will do; who they hurt and what we need instead
by Dick Eastman
Banks in Europe and the US do not keep their reserves in the branch vault. They keep them on account with the central bank. The central bank sets a reserve reqirement forcing banks to have so much money deposited with the central bank for so much loaned out by the bank. But in a deflationary economy -- which is the kind of economy creditors like -- there are two reasons why banks hold more reserves than they need to, why they don't lend all that they can. The first is that in deflation dollars gain in value over time even when they are not "put to work" via lending. The second is that in a monetary deflation there is less and less money that can become revenue for businesses that borrow, meaning that their is greater chance that costs will exceed revenue -- because the cost to produce preceeds selling of the final product by a time interval which in deflation means costs -- especially financing costs and fixed costs -- were incurred when dollars were relatively plentiful and sale of product occurs when dollars are relatively less plentiful. This messes up the plans of businessmen who figured on no deflation when they planned how much they would produce and and what cost and at what expected realizable sale price.
Let me restate that more simply:
So banks have not been lending because 1) banks don't need to lend them to make money -- they just keep the dollars which gain in value without being invested and earning interest. And 2) banks see that business firms that borrow in a deflation will face dried up demand for their product after the borrowed money has been spent to produce product -- the risk of default is great.
The entrepreneur who borrows also sees deflation and knows that it will be harder to earn dollars in the future by which to repay principal plus compounding interest -- provided he knows what he is doing. Of course the entrepreneur may not see the deflation - he may be listening to Peter Schiff, Gerald Celente and all the other Austrian Schoolers who tell them that hyper inflation is around the corner.
So let us get back reserves. The banks holdt their reserves (both reserves required to cover loans outstanding and reserves that could be lent but are being kept idle in a deflationary environment) -- they hold their reserves on account with the central bank.
Now as things have worked in the past, in a less deflationary environment, banks would lend close to all they could, which is to say, they would lend almost all of the excess reserves and hold just their reserves required of them by the reserve requirement set by the central bank. There would always be a some excess reserves kept over the required amount -- just in case depositors at the bank suddenly withdrew more that the usual or expected amount -- which would mean falling short of legally required reserves which would mean fines and other penalties for not following the rules.
Under this practice of lending all they legally could except for "some extra reserve" or "just-in-case" reerve to handle unexpected withdrawals -- the central bank could get banks to lend more by allowing firms to get loans from the central bank to cover them when the unexpected withdrawals occur. The mechanism for getting banks to lend more or lend less by making it cheaper or dearer to keep less "just-in-case" extra reserves on hand and be caught short when unexpected withdrawals come.
The name of this interest rate that the central bank charges system lending banks is the discount rate -- because the banks pledge securities called "paper" for the loan -- the paper is discounted from its face value -- which is why the central banks lending rate is called the discount rate.
It is this discount rate that has just been allowed to go negative.
Think about what this means.
In non-deflationary times when the central bank wants the system lending institutions to lend more (while keeping the reserve requirement unchanged) it lowers the interest rate at which it lends money to banks that have gotten in trouble with unexpected withdrawals. (And remember, in deflation the deposits are getting fewer -- because they are draining away as principal is payed extinguishing the original loan amount and because interest is paid to the bank which the bank keeps as idle cash balances -- idle reserves not being lent out.
Under the old practice that allows the discount rate to go to zero and no lower -- there is a limit to central bank encouragement of lending institutions to get them to lend their excess reserves.
But now we have the EU central bank asking actual payment for keeping idle funds.
This is not a negative discount rate -- it is a negative interest rate on excess reserves. IThey are not taxing required reserves that are hard at work backing loans -- but the interest charge is only on excess reserves.
I said that banks do not keep their reserves in the vault, but on account with the central bank.
I assume that the EU Central bank will not permit the lending institutions to take their money out of the central bank and put it somewhere else where it can be idle and continue soaking up deflation premium value without doing any work.
The European Central Bank is charging the systems lending institutions money for keeping idle reserves ("excess reserves") in the hope that EU lending institutions will lend to european entrepreneurs and home buyers to end the deflationary depression without ending the cause of the deflation (which makes all bankers filthy rich).
Will it work?
I say it will not. The truth of the matter is that deflation is so bad -- euros (and dollars) are getting so valuable in terms of the bankrupt factories and privatized public utilities that they can buy in a deflationary depression -- and even consumer prices are falling -- and wages are falling along with increased unemployment -- that the reward to idle funds that just stay home without having to go out as a loan and incur risk of default in a bad economy is still too great. The deflationary depression was not stopped when the discount rate went from 1 percent to half a percent or from half a per cent to zero percent and so it will not be stopped when the central bank starts charging interest on excess reserves -- because the deflationary premium is bigger. The lending institutions are not going to lend more -- they are simply going to pay interest for the privilege of enjoying the deflationary gain that the central bank and big London and Hong Kong finance have arranged. the big boys are taking back some of the action.
I say the big boys are simply taking back some fo the deflationary premium action from the small lending institutions. Nothing has been done to end the actual deflation. Certainly the private banks, with private books, are not affected by what commercial banks must do -- but far more than this -- who owns the central bank that is collecting this "tax" on idle reserves from lending institutions -- making sure they will have less money on hand when at some point in the future a real credit expansion starts to lift the economy. By that time a sizable amount of excess reserves the small lending institutions have had will accumulated will be gone.
One must realize that the big bankers (banking family trusts) who own and control the central banks are maximizizng their wealth -- and that means they are swallowing up the smaller lending institutions. The big bankers own the central bank and so when they charge small banks for holding excess reserves in a deflation they are getting the proceeds and making those smaller banks weaker -- so that when the day of reflation comes - the next Mississippi bubble, steam, or electricity, or railroads, or television or dot.com or big war equivalent -- those little banks will not be in a position to catch the wave -- provided they are not belly up before that time.
The negative interest rate could never work. If the negative interest rate is smaller than the deflation gain in the real value of idle excess reserves -- there still will be no increase in lending. If the negative intersest rate is greater than the rate of deflation -- "lend it or lose it" -- then what we will see will be a lot of bank failures -- since a negative interest penalty still does not mean that there is going to be lending that ends deflation and ignites a boom. Banks will take their excess funds and declare higher dividends. They will pay them out as bonuses. They will not start looking harder for places to invest. They are not geared for that. These is little occasion for that. The debt outstanding is too big. The interest drain from the whole economy is many fold bigger than addition that the negative interest rate might squeeze out for additional lending.
You can't increase lending unless there is first an increase in real demand from consumers. Right now the consumers have debt and their only way to provide the economy they live in with money for paychecks and food purchases is by getting second mortgages or refinancing their loans.
That is how we have been kept with a money supply. Since banks haven't been lending to American business start-ups and expansions for some time - what has been done is that to have a money supply in the domestic economy banks have been slowly lowering interest rates -- so that as a new slightly lower interest rate appears -- more people would see the change to refinance the two mortgages at a lower monthly premium (forgetting about the loss they must take in getting further away from paying off principal). So the money lender gets the deed to the house and keeps letting the "home buyer" refinance to keep new money in the system by having the home owners lose more and more equity that they built up through years of toil.
So what must be the next step? Of course. From a negative discount rate to soak the small lending institutions they will move to a negative interest rate on home loans -- and people will be fooled -- for a while -- into thinking they are gaining because home owners can refinance at zero interest rate and soon at a negative interest rate. But will anything be changed by this? Only that the game of draining people of their equity in order to buy a money supply for the country will continue.
People will at first think that refinancing with a negative interest rate is great -- but what they are missing is that it is only the NOMINAL interest rate that is declining -- not the REAL RATE. Because the the Central Bank and Big Finance which owns it has not really increased credit to the people -- because there still in no permanent money supply so that there still is a condition that every dollar of loan injected means principal plus interest totalling more than the loan must be taken out - that does not change. The deflation goes on. We have trillions of dollars of debt that we must pay on schedule -- and that burden remains, That burden is fixed. And the interest payments on that burden are such a drain that the little gain from a positive interest rate to equity loans is not going to affect the super-cell deflationary spiral caused by the very structure of the system that the EU Central bank dares not tamper with. The EU Central Bank is a creature of the creditors who hold the debt of the world -- and they are never going to do anything that will change that equation.
The only solution is the honest one -- the populist one of repudiation of all debt to the banking crime families, the nationalization of money supply with permanent thin-air created (costless) money that enters the economy via an equal dividend to every citizen of every household -- so that consumer demand will be the wealth pump that makes entrepreneurial ventures earn money.
I offer my version of such a populist solution for your consideration:
AMERICAN POPULIST SOCIAL CREDIT
1. repudiation of fraudulent debt to bankers
2. institute permanent national money created by fiat (from "thin air")
3. originate all new money exclusively in citizen's primary bank account as free and clear household sector dividend
4. seperate banking from money creation, ending the fractional reserve banking system and requiring that money creation and distribution to households be a Federal function and the chartering and regulation of banks be a function and responsibility of the states
5. require that banks lend only funds entrusted to the bank by money owners for that purpose
6. eliminate the federal income tax which penalizes productivity and initiative, and replace it with direct taxes equally applied individually imposed for each item of public service approved by Congress, with also a direct excessive wealth tax services including inheritance tax
7. require that the risk of all bank financed transactions be shared between borrower and lender, so banks can only recoup 1/2 of principal in event business loss resulting in default
8. elimination of all national banks, allowing the states to regulate banking while government regulates the money supply dividend to households
9. ending of foreign investment here and American investment abroad
10. severing the domestic monetary unit from the international dollar -- allowing the Federal Reserve leave the country taking the international dollar with it
11. regulate foreign trade to ensure that imports in the course of a year are paid for by exports, i.e., balanced trade
12. abolish the corporation as a structure of American business enterprise, breaking up all corporations into single proprietorships or partnerships
13. eliminate the Internal Revenue Service, tax collection being taken over by the US Treasury and enforced by US marshals -- impose an excess wealth tax
14. end all deficit finance by government -- require that all government goods and services be funded by direct taxation and fees
15. elimination of all trust foundations with all good causes being funded for current expenses only and non-profit corporations
16 expand and conscientiously enforce anti-trust and anti-monopoly law and regulation extending these especially to mass-media with the understanding that monopoly in media is an infringement of everyones right to free political speech where the minority view always has the possibility, through persuasion, of becoming the majority, which is not the case when a few people own all mass-media
17. limit the ownership of rental properties, news media, the number of homes and the total acreage individuals, and businesses may own
18. requiring by amendment to the Constitution that only uncommitted electors be chosen to the electoral college which both find elect the best qualified president (as the Founding fathers intended), the repuation, character, knowledge of public issues, good and wisdom of the electors who select our presidents being the crition upon which electors will be compared and chosen
19. end the popular election of Senators, once again having the State legislatures choose US Senators for their respective states
20. legalize addictive drugs and provide them at cost to addicts so that organized crime will not capture the billions of dollars supplied to households through the new money dividend and so the monopolists high-price incentive to push drugs will be 100 percent eliminated
21. while debt to international lenders will be repudiated, money owed to creditor states, like China and Japan may be settled by 1) letting China have all presently American owned shares of industrial assets in China sometimes up to 49 percent of Chinese industrial firms 2) giving Alaska to Japan for settlement -- even as we hope that with the perfection of American Populist Social Credit the people of Canada would be willing to sever all ties with the United Kingdom so that her provinces would become new states of the United States -- with the possible exception of Quebec which would become a French speaking independent state -- this exchange could also be part of an international settlement that would resolve disputes over the ownership of islands among Japan, China and Russia.
22. the calling back of all American military forces on foreign lands, bringing home all military equipment useful in providing for the defense of the United States
23. ending the American standing army, turning over all military equipment and personnel to the 50 states with the Federal Government only controlling a centralized command structure to be activated only in time of declared war which alone allows the Federal Government to nationalize national guard units
24. disarm the Federal Bureau of Investigation and eliminate both the Central Intelligence Agency and the National Security Agency eliminate the Department of Homeland Security, Department of Education
25. end all Federal government aid to all nations while permitting Americans to give charity and aid to those in need of their own free will
26. deny jurisdiction to admiralty law, withdraw from NATO, the IMF, the World Bank, the World Trade Organization, Basil Accords, and from the United Nations until the National Security Council is abolished and terminate all treaties with the state of Israel in keeping with an American policy of non-entanglement in disputes among nations. The US can however subscribe to the jurisdiction of an international court for the resolution of international trade disputes.
27. end all Federal gun control laws -- leaving this matter to the states in their conforming to the Bill of Rights
28 disallow all members of the bar from practicing law in United States Courts, the United States courts themselves creating its own tests and qualifications for pleading before the bench of American national courts
29 by constitutional amendment enact 12-man jury nullification in American courts and the principle that juries decide when the letter of the law oversteps the spirit of the law and whether precedent shall or shall not be upheld
30 ability to practice law should be open to anyone who passes the federal law exam, possibly with lawyer specialties enabling a person to qualify for pleading specific narrow ranges of law. A very high percentage of the common people should be qualified to practice law
Populist National Social Credit Brotherhood of American Citizen Peacemakers of All Races and Creeds -- This is our Common Ground!!!
---------------
2 comments
Deflation is less money in circulation for use in buying, in hiring, and in paying mortgage interest and taxes.
Deflation reduces purchasing power of consumers and businesses causing demand curve to shift left which as you know tends to lower prices. But less money going around also reduces supply because there are fewer sellers, less orders for new product and more fixed cost per unit produced causing prices to rise. In the money deflation in the US the downward shift of supply pushing up prices more than less demand pushes prices down.
So we have less money in deflation with some prices rising. Supply effects for the two goods you mention result because food and gas to get to work are goods that people are the last to cut. This analysis by the way explains what "stagflation" is -- rising prices with falling demand and output. However, there has been a new development -- in Europe now prices are going down -- meaning that the fall of demand owing to less purchasing power medium is overpowering the effect of fewer suppliers. With this development it becomes impossible for the EU Central Bank to maintain the fiction that they are fighting deflation.
Creditors always like deflation -- because it makes them richer -- they can buy foreclosed factories and houses cheaply with all of their dollars that are offshore.
2
I prefer to find the person who is pulling the levers that are hurting us and take control of those levers away from them. The lever I am talking about is the private banking systems power to make and destroy money and to expand and contract credit for their profit at our expense. Let the households have easy money and let them pay for government directly and up front out of their pocket -- then and only then will the common citizen be vigilant in watching government spending.
by Dick Eastman
Banks in Europe and the US do not keep their reserves in the branch vault. They keep them on account with the central bank. The central bank sets a reserve reqirement forcing banks to have so much money deposited with the central bank for so much loaned out by the bank. But in a deflationary economy -- which is the kind of economy creditors like -- there are two reasons why banks hold more reserves than they need to, why they don't lend all that they can. The first is that in deflation dollars gain in value over time even when they are not "put to work" via lending. The second is that in a monetary deflation there is less and less money that can become revenue for businesses that borrow, meaning that their is greater chance that costs will exceed revenue -- because the cost to produce preceeds selling of the final product by a time interval which in deflation means costs -- especially financing costs and fixed costs -- were incurred when dollars were relatively plentiful and sale of product occurs when dollars are relatively less plentiful. This messes up the plans of businessmen who figured on no deflation when they planned how much they would produce and and what cost and at what expected realizable sale price.
Let me restate that more simply:
So banks have not been lending because 1) banks don't need to lend them to make money -- they just keep the dollars which gain in value without being invested and earning interest. And 2) banks see that business firms that borrow in a deflation will face dried up demand for their product after the borrowed money has been spent to produce product -- the risk of default is great.
The entrepreneur who borrows also sees deflation and knows that it will be harder to earn dollars in the future by which to repay principal plus compounding interest -- provided he knows what he is doing. Of course the entrepreneur may not see the deflation - he may be listening to Peter Schiff, Gerald Celente and all the other Austrian Schoolers who tell them that hyper inflation is around the corner.
So let us get back reserves. The banks holdt their reserves (both reserves required to cover loans outstanding and reserves that could be lent but are being kept idle in a deflationary environment) -- they hold their reserves on account with the central bank.
Now as things have worked in the past, in a less deflationary environment, banks would lend close to all they could, which is to say, they would lend almost all of the excess reserves and hold just their reserves required of them by the reserve requirement set by the central bank. There would always be a some excess reserves kept over the required amount -- just in case depositors at the bank suddenly withdrew more that the usual or expected amount -- which would mean falling short of legally required reserves which would mean fines and other penalties for not following the rules.
Under this practice of lending all they legally could except for "some extra reserve" or "just-in-case" reerve to handle unexpected withdrawals -- the central bank could get banks to lend more by allowing firms to get loans from the central bank to cover them when the unexpected withdrawals occur. The mechanism for getting banks to lend more or lend less by making it cheaper or dearer to keep less "just-in-case" extra reserves on hand and be caught short when unexpected withdrawals come.
The name of this interest rate that the central bank charges system lending banks is the discount rate -- because the banks pledge securities called "paper" for the loan -- the paper is discounted from its face value -- which is why the central banks lending rate is called the discount rate.
It is this discount rate that has just been allowed to go negative.
Think about what this means.
In non-deflationary times when the central bank wants the system lending institutions to lend more (while keeping the reserve requirement unchanged) it lowers the interest rate at which it lends money to banks that have gotten in trouble with unexpected withdrawals. (And remember, in deflation the deposits are getting fewer -- because they are draining away as principal is payed extinguishing the original loan amount and because interest is paid to the bank which the bank keeps as idle cash balances -- idle reserves not being lent out.
Under the old practice that allows the discount rate to go to zero and no lower -- there is a limit to central bank encouragement of lending institutions to get them to lend their excess reserves.
But now we have the EU central bank asking actual payment for keeping idle funds.
This is not a negative discount rate -- it is a negative interest rate on excess reserves. IThey are not taxing required reserves that are hard at work backing loans -- but the interest charge is only on excess reserves.
I said that banks do not keep their reserves in the vault, but on account with the central bank.
I assume that the EU Central bank will not permit the lending institutions to take their money out of the central bank and put it somewhere else where it can be idle and continue soaking up deflation premium value without doing any work.
The European Central Bank is charging the systems lending institutions money for keeping idle reserves ("excess reserves") in the hope that EU lending institutions will lend to european entrepreneurs and home buyers to end the deflationary depression without ending the cause of the deflation (which makes all bankers filthy rich).
Will it work?
I say it will not. The truth of the matter is that deflation is so bad -- euros (and dollars) are getting so valuable in terms of the bankrupt factories and privatized public utilities that they can buy in a deflationary depression -- and even consumer prices are falling -- and wages are falling along with increased unemployment -- that the reward to idle funds that just stay home without having to go out as a loan and incur risk of default in a bad economy is still too great. The deflationary depression was not stopped when the discount rate went from 1 percent to half a percent or from half a per cent to zero percent and so it will not be stopped when the central bank starts charging interest on excess reserves -- because the deflationary premium is bigger. The lending institutions are not going to lend more -- they are simply going to pay interest for the privilege of enjoying the deflationary gain that the central bank and big London and Hong Kong finance have arranged. the big boys are taking back some of the action.
I say the big boys are simply taking back some fo the deflationary premium action from the small lending institutions. Nothing has been done to end the actual deflation. Certainly the private banks, with private books, are not affected by what commercial banks must do -- but far more than this -- who owns the central bank that is collecting this "tax" on idle reserves from lending institutions -- making sure they will have less money on hand when at some point in the future a real credit expansion starts to lift the economy. By that time a sizable amount of excess reserves the small lending institutions have had will accumulated will be gone.
One must realize that the big bankers (banking family trusts) who own and control the central banks are maximizizng their wealth -- and that means they are swallowing up the smaller lending institutions. The big bankers own the central bank and so when they charge small banks for holding excess reserves in a deflation they are getting the proceeds and making those smaller banks weaker -- so that when the day of reflation comes - the next Mississippi bubble, steam, or electricity, or railroads, or television or dot.com or big war equivalent -- those little banks will not be in a position to catch the wave -- provided they are not belly up before that time.
The negative interest rate could never work. If the negative interest rate is smaller than the deflation gain in the real value of idle excess reserves -- there still will be no increase in lending. If the negative intersest rate is greater than the rate of deflation -- "lend it or lose it" -- then what we will see will be a lot of bank failures -- since a negative interest penalty still does not mean that there is going to be lending that ends deflation and ignites a boom. Banks will take their excess funds and declare higher dividends. They will pay them out as bonuses. They will not start looking harder for places to invest. They are not geared for that. These is little occasion for that. The debt outstanding is too big. The interest drain from the whole economy is many fold bigger than addition that the negative interest rate might squeeze out for additional lending.
You can't increase lending unless there is first an increase in real demand from consumers. Right now the consumers have debt and their only way to provide the economy they live in with money for paychecks and food purchases is by getting second mortgages or refinancing their loans.
That is how we have been kept with a money supply. Since banks haven't been lending to American business start-ups and expansions for some time - what has been done is that to have a money supply in the domestic economy banks have been slowly lowering interest rates -- so that as a new slightly lower interest rate appears -- more people would see the change to refinance the two mortgages at a lower monthly premium (forgetting about the loss they must take in getting further away from paying off principal). So the money lender gets the deed to the house and keeps letting the "home buyer" refinance to keep new money in the system by having the home owners lose more and more equity that they built up through years of toil.
So what must be the next step? Of course. From a negative discount rate to soak the small lending institutions they will move to a negative interest rate on home loans -- and people will be fooled -- for a while -- into thinking they are gaining because home owners can refinance at zero interest rate and soon at a negative interest rate. But will anything be changed by this? Only that the game of draining people of their equity in order to buy a money supply for the country will continue.
People will at first think that refinancing with a negative interest rate is great -- but what they are missing is that it is only the NOMINAL interest rate that is declining -- not the REAL RATE. Because the the Central Bank and Big Finance which owns it has not really increased credit to the people -- because there still in no permanent money supply so that there still is a condition that every dollar of loan injected means principal plus interest totalling more than the loan must be taken out - that does not change. The deflation goes on. We have trillions of dollars of debt that we must pay on schedule -- and that burden remains, That burden is fixed. And the interest payments on that burden are such a drain that the little gain from a positive interest rate to equity loans is not going to affect the super-cell deflationary spiral caused by the very structure of the system that the EU Central bank dares not tamper with. The EU Central Bank is a creature of the creditors who hold the debt of the world -- and they are never going to do anything that will change that equation.
The only solution is the honest one -- the populist one of repudiation of all debt to the banking crime families, the nationalization of money supply with permanent thin-air created (costless) money that enters the economy via an equal dividend to every citizen of every household -- so that consumer demand will be the wealth pump that makes entrepreneurial ventures earn money.
I offer my version of such a populist solution for your consideration:
AMERICAN POPULIST SOCIAL CREDIT
1. repudiation of fraudulent debt to bankers
2. institute permanent national money created by fiat (from "thin air")
3. originate all new money exclusively in citizen's primary bank account as free and clear household sector dividend
4. seperate banking from money creation, ending the fractional reserve banking system and requiring that money creation and distribution to households be a Federal function and the chartering and regulation of banks be a function and responsibility of the states
5. require that banks lend only funds entrusted to the bank by money owners for that purpose
6. eliminate the federal income tax which penalizes productivity and initiative, and replace it with direct taxes equally applied individually imposed for each item of public service approved by Congress, with also a direct excessive wealth tax services including inheritance tax
7. require that the risk of all bank financed transactions be shared between borrower and lender, so banks can only recoup 1/2 of principal in event business loss resulting in default
8. elimination of all national banks, allowing the states to regulate banking while government regulates the money supply dividend to households
9. ending of foreign investment here and American investment abroad
10. severing the domestic monetary unit from the international dollar -- allowing the Federal Reserve leave the country taking the international dollar with it
11. regulate foreign trade to ensure that imports in the course of a year are paid for by exports, i.e., balanced trade
12. abolish the corporation as a structure of American business enterprise, breaking up all corporations into single proprietorships or partnerships
13. eliminate the Internal Revenue Service, tax collection being taken over by the US Treasury and enforced by US marshals -- impose an excess wealth tax
14. end all deficit finance by government -- require that all government goods and services be funded by direct taxation and fees
15. elimination of all trust foundations with all good causes being funded for current expenses only and non-profit corporations
16 expand and conscientiously enforce anti-trust and anti-monopoly law and regulation extending these especially to mass-media with the understanding that monopoly in media is an infringement of everyones right to free political speech where the minority view always has the possibility, through persuasion, of becoming the majority, which is not the case when a few people own all mass-media
17. limit the ownership of rental properties, news media, the number of homes and the total acreage individuals, and businesses may own
18. requiring by amendment to the Constitution that only uncommitted electors be chosen to the electoral college which both find elect the best qualified president (as the Founding fathers intended), the repuation, character, knowledge of public issues, good and wisdom of the electors who select our presidents being the crition upon which electors will be compared and chosen
19. end the popular election of Senators, once again having the State legislatures choose US Senators for their respective states
20. legalize addictive drugs and provide them at cost to addicts so that organized crime will not capture the billions of dollars supplied to households through the new money dividend and so the monopolists high-price incentive to push drugs will be 100 percent eliminated
21. while debt to international lenders will be repudiated, money owed to creditor states, like China and Japan may be settled by 1) letting China have all presently American owned shares of industrial assets in China sometimes up to 49 percent of Chinese industrial firms 2) giving Alaska to Japan for settlement -- even as we hope that with the perfection of American Populist Social Credit the people of Canada would be willing to sever all ties with the United Kingdom so that her provinces would become new states of the United States -- with the possible exception of Quebec which would become a French speaking independent state -- this exchange could also be part of an international settlement that would resolve disputes over the ownership of islands among Japan, China and Russia.
22. the calling back of all American military forces on foreign lands, bringing home all military equipment useful in providing for the defense of the United States
23. ending the American standing army, turning over all military equipment and personnel to the 50 states with the Federal Government only controlling a centralized command structure to be activated only in time of declared war which alone allows the Federal Government to nationalize national guard units
24. disarm the Federal Bureau of Investigation and eliminate both the Central Intelligence Agency and the National Security Agency eliminate the Department of Homeland Security, Department of Education
25. end all Federal government aid to all nations while permitting Americans to give charity and aid to those in need of their own free will
26. deny jurisdiction to admiralty law, withdraw from NATO, the IMF, the World Bank, the World Trade Organization, Basil Accords, and from the United Nations until the National Security Council is abolished and terminate all treaties with the state of Israel in keeping with an American policy of non-entanglement in disputes among nations. The US can however subscribe to the jurisdiction of an international court for the resolution of international trade disputes.
27. end all Federal gun control laws -- leaving this matter to the states in their conforming to the Bill of Rights
28 disallow all members of the bar from practicing law in United States Courts, the United States courts themselves creating its own tests and qualifications for pleading before the bench of American national courts
29 by constitutional amendment enact 12-man jury nullification in American courts and the principle that juries decide when the letter of the law oversteps the spirit of the law and whether precedent shall or shall not be upheld
30 ability to practice law should be open to anyone who passes the federal law exam, possibly with lawyer specialties enabling a person to qualify for pleading specific narrow ranges of law. A very high percentage of the common people should be qualified to practice law
Populist National Social Credit Brotherhood of American Citizen Peacemakers of All Races and Creeds -- This is our Common Ground!!!
---------------
2 comments
Deflation is less money in circulation for use in buying, in hiring, and in paying mortgage interest and taxes.
Deflation reduces purchasing power of consumers and businesses causing demand curve to shift left which as you know tends to lower prices. But less money going around also reduces supply because there are fewer sellers, less orders for new product and more fixed cost per unit produced causing prices to rise. In the money deflation in the US the downward shift of supply pushing up prices more than less demand pushes prices down.
So we have less money in deflation with some prices rising. Supply effects for the two goods you mention result because food and gas to get to work are goods that people are the last to cut. This analysis by the way explains what "stagflation" is -- rising prices with falling demand and output. However, there has been a new development -- in Europe now prices are going down -- meaning that the fall of demand owing to less purchasing power medium is overpowering the effect of fewer suppliers. With this development it becomes impossible for the EU Central Bank to maintain the fiction that they are fighting deflation.
Creditors always like deflation -- because it makes them richer -- they can buy foreclosed factories and houses cheaply with all of their dollars that are offshore.
2
I prefer to find the person who is pulling the levers that are hurting us and take control of those levers away from them. The lever I am talking about is the private banking systems power to make and destroy money and to expand and contract credit for their profit at our expense. Let the households have easy money and let them pay for government directly and up front out of their pocket -- then and only then will the common citizen be vigilant in watching government spending.
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