Hands Off My Monetary System!

The history of the monetary system of America from Colonial times to today is a story of the gradual downfall of a triumphant monetary system. An understanding of money and the monetary system is necessary for an Occupier to understand some of the problems our financial system suffers from today.

Money for the most part has been an instrument to facilitate commerce, and even though currency manipulation has become everyday business, the average person, the Occupier, still depends on it solely for that originally intended purpose. Almost all we do in our lives, from the daily trivia to life-changing decisions, are dependent on this medium. Without it we would be paralyzed.

To my questions about the movement one of the members of the Riverside chapter said,” I want us to have a true democracy, where the PEOPLE really get to decide their fate.”

Democracy is dependent on a fair distribution of power among the people. A country that has an uneven distribution of power in favor of a few cannot lay claim to being a democracy. However, a few power-hungry and greedy individuals or groups will always strive for as much power as they can get. One way they concentrate power is by taking control of money and the monetary system.

That control of the system renders power to whoever holds it, because money is the life blood of our societies, it is in our pockets, it is a part of what we do for a living and why we do it, it is how we decide the way our families are run, and it shapes what lives our children live and what future they will lead. Money is in our lives and on our minds. Democracy is the ability to make these choices as freely as possible and money is the medium that makes it all possible. Yet how much of it is available and how much it is worth is decided by a very few. And so the power to influence those very crucial choices on a national scale or on a very personal level is also delegated to those few. Hence money is equal to power, and control of the monetary system translates to power over everybody.

The ability of all the people to make those choices freely is essential to a democracy and such a democracy cannot possibly exist side by side with a system that assigns that power to a few.

The value of the work you have done and all the assets you own is very dependent on the value of money, and the value of money depends on its supply. A saturation of the money supply will under-value the currency and a lack of supply will overrate its value, and this flow of currency is controlled by the banks.

Under the current monetary system in the USA, banks do the work of creating, managing, and manipulating money, which is arguably an interpretation of the word business. So an argument against the banks can easily be misconstrued as an argument against business in general. And even though all businesses use the same tactics of manipulating supply and demand to induce profit, most of them work individually and their reach and control is limited to a few products and particular industries.

The banks, however, produce the life blood of our society. Their product is money and with a centralized banking system they manage to enforce a monopoly on that particular product.

In other words, the act of creating and distributing money, which is a function of a government that is representative of the people, has been delegated to a few who not only don’t represent the public as a whole but don’t have any interest in their well-being.

Instead of being issued by elected representatives, money is created by the Federal Reserve, which is a partly private and partly public institution, and by fully private banks.

The power to conduct monetary policy was given to the Federal Reserve in 1913 by the Congress and "its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government."

The US Monetary system is a debt-based system. When more money is necessary either to increase cash flow or to pay for a government program, the Federal Reserve does that by monetizing debt. The government, which represents the public, issues debt, and the Federal Reserve then purchases the public’s debt, and that increases the supply of money. Hence the money the public worked for is owed to the Federal Reserve.

Questioning the legitimacy of a central banking system isn’t a crazy idea. The debate about the practicality and legitimacy of a national bank isn’t new either. It started way before Capitalism or Socialism: it pre-dates Conservatism and Liberalism.

As a matter of fact many of the founding fathers were against a centralized banking system and a national bank that had power over the supply of money. They argued that this system would put too much power into the hands of those few who had access to and control over the national bank. Some like Thomas Jefferson were skeptical of banks in general and didn’t trust them with such powers. Jefferson didn’t think the Constitution gave the Congress the power to erect such a bank.

Thomas Jefferson had this to say about this system and a national bank’s ability to create money: “The issuing power should be taken from the banks, and restored on the people to whom it properly belongs.”

Another way money is created is by the method of Fractional Reserve at the level of private banks. This means that a bank is only required to keep a portion of the money deposited by its members as reserve, and it can then lend the remainder out with interest. The ratio of fractional reserves is determined by the Federal Reserve Bank.

When a member deposits an amount of money with the bank the bank loans a portion to another individual or party with interest. The other party also deposits that money into a bank, and technically both parties have money in their accounts that exceeds the originally deposited amount. This is how fractional reserve banking expands money supply.

Hence private banks control money supply by controlling the number of loans they grant and that decision is based on the owners and investors of the banks, depending on their profitability.
The concentration of wealth within the grasp of a few is not because the top 1% are the only ones that work hard, and it is neither just by accident nor a coincidence born out of the free market. It is the result of a very controlled market, geared towards profiting only a few.

This system is flawed and inefficient. It isn’t just a system that serves the interest of a handful; it is a system that achieves this goal by a systematic and calculated disservice to the rest. It isn’t too farfetched to say that a system that is threatened by the well-being of the people as a whole has a stake in their misery.

In a system in which the representatives of the people don’t have the power to issue debt-free money, ordinary people are left at the mercy of the banks. This system undermines a country’s sovereignty.

We work within a monetary system that functions on debt, and our debts are bought and sold for profit. This way our country is in debt to private investors and foreign countries. This monetary system undermines our ability to shape fiscal policy, public policy, the ability to defend ourselves against foreign nations, and our ability to find our way out of fiscal depressions.
Thomas Jefferson understood this very well:

“I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?" --Thomas Jefferson to Albert Gallatin, 1803. ME 10:437

Jefferson’s fears came to life during the Civil War, so much so that Abraham Lincoln found the country unable to fund the war through the banks and had to go back to debt-free money: the Greenbacks.

Let us remember what money is and the function the monetary system is supposed to serve. The monetary system is a government creation by the demand of the people to help facilitate commerce and in doing so serve the well-being of the public. It shouldn’t be used to dictate trade and bias freedom of choice.

This isn’t an obscure idea. In fact the United States is a country that has had much experience with debt-free money. The history of debt-free money in America begins way before the revolutionary war.

When Benjamin Franklin travelled to England as a representative of the Colonies, the English officials wondered how the Colonies managed such a surprisingly sound economy on their own.

"That is simple.” he replied, “In the Colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay no one." Benjamin Franklin.

A day that we can again take that much pride in our monetary system seems so farfetched. Our benefit from a medium that was suppose to exist to facilitate everyday life for the subjects of our country has become a business for the wealthy that occasionally benefits the public as a side effect, if at all.

The United States not only has a lot of experience with debt-free money, she also has more experience than any other country in empowering the people. That is what America is about, that is what brought people from all over the world to congregate here, the ability of a people to decide what lives they want to lead and how. America has always meant power to the people. We just have to remember that!

We have been made to believe that we must play by their rules, even though the rules are ours. We must first know who we are, what we own, and then it will be clear that they have taken ownership of all that is inherently ours:

They may have bought the congressmen and women, they may have influenced our representatives to represent them and theirs, but the legislative branch is ours.

They may have influenced the judges but the Judiciary is ours.

They may have bought all the police departments in the country, but those uniforms and the Executive Branch are ours.

They may own all the fancy cars and private jets, but the roads and the skies are ours.

Similarly they can own all the money in the world, but the monetary system is ours.

The power of the majority, the 99%, cannot be undermined once they realize that when united they are the owners of all that is common. What the dealer doesn’t want us Occupiers to know is that even though they may have rigged the game the cards are still ours. That knowledge is the ultimate wake-up call.

Occupy!