Let Local Bureaucrats Spend Central Bank Super Money
By Staff News & Analysis - February 26, 2013

How the Fed Could Fix the Economy—and Why It Hasn't … Quantitative easing (QE) is supposed to stimulate the economy by adding money to the money supply, increasing demand. But so far, it hasn't been working. Why not? Because as practiced for the last two decades, QE does not actually increase the circulating money supply. It merely cleans up the toxic balance sheets of banks. A real "helicopter drop" that puts money into the pockets of consumers and businesses has not yet been tried. Why not? Another good question . . . . – Global Research

Dominant Social Theme: Free the banks! Free the people!

Free-Market Analysis: Ellen Brown is back with another idea of how to get the US economy moving again: Print money and give it to federal and local governments.

[I]ndependence has really come to mean a central bank that has been captured by Wall Street interests, very large banking interests. It might be independent of the politicians, but it doesn't mean it is a neutral arbiter. During the Great Depression and coming out of it, the Fed took its cues from Congress. Throughout the entire 1940s, the Federal Reserve as a practical matter was not independent. It took its marching orders from the White House and the Treasury—and it was the most successful decade in American economic history.

To free the central bank from Wall Street capture, Congress or the president could follow the lead of Shinzo Abe and threaten a hostile takeover of the Fed unless it directs its credit firehose into the real economy. The unlimited, near-zero-interest credit line made available to banks needs to be made available to federal and local governments.

Good Lord. Once again to the breach. Ms. Brown is back with another screed celebrating local US bureaucracy and proposing that it be empowered with the endless wealth of printing presses. In this article she makes the point that banking reserves will never circulate because they are "reserves."

We won't get into the details, but she seems to have some confusion – perhaps purposeful – over what constitutes a modern bank reserve. Additionally, while reserves may not circulate, extra money that banks are loaded up with thanks to the Fed can certainly circulate. And when a boom is finally triggered … it will, just as it did in the 1970s.

We try to be courteous to Ms. Brown as an articulate proponent of her cause. But we are regularly confused by her … more and more, in fact. In this case, we're not quite sure what the statement above is referring to, as the federal government is already quite well funded, thank you – or at least it doesn't seem to have trouble borrowing as much as it needs, impending sequester or not.

As far as localities go, Ms. Brown has been pushing this for a long time. She wants to empower local banks to print and spend. She wants to empower local governments to circulate money locally. She is convinced that fiat money liberally dispersed can create wealth.

Ms. Brown is part of what we have started to call the National Socialist fiat-money crowd. This group includes Bill Still, Brown and others – in what can only be described as a vast, orchestrated dominant social theme to involve the government directly in printing monopoly fiat money.

This is what Hitler himself did in the final waning years of the Reich. He simply set the value and price of money as he chose. This is, in fact, the logical outcome of such schemes.

It is Money Power that is actually behind this meme – evidently and obviously. Money Power needs government because it expands and gains power via mercantilism. Government – and government monopoly central banking – provides the beard.

This is why the United Nations is so involved in local barter-oriented money systems and why the top elites will do anything to maintain the central banking system, even setting it up locally.

This is what Ms. Brown is endorsing … and others as well. While the plan is a Nazi one, as free-market economists like Gary North have described it, the local-orientation is supposed to render it attractive. That's why Global Research and other alternative websites – for all the good they do, courageously – can endorse these flawed concepts.

But make no mistake. The reality is that fascist theories of Gesell, Douglas and others rely on price-fixing of money … and then its distribution on the widest level possible. Throw in anti-usury rhetoric and you've got a monetary system that fully celebrates the state. Uncle Adolf sure would be proud.

Of course, you have to add in a thick layer of confusion. Ms. Brown changes her mind so much about fiat money distribution that we can't keep up with it. Sometimes, as we recall, she's praised the eternally corrupt Indian central bank because of its "independence" and sometimes she's even had a kind word for the Fed's Ben Bernanke.

Others have changed their minds countless times on this issue as well, launching perorations that establish themselves as anti-Nazi even though the systems they want to install – and force people to use – are most effective at a national level.

These people – agents of Money Power, from what we can tell – wish to disguise who they are and what their real agenda is. They smear free markets without ever explaining that the replacement is to be command-and-control economies. They dress up their vicious ideas as gracious "populist" systems – as if populism was something other than a gateway to authoritarianism and then worse.

Despicably, they use language of Christian spirituality to hide behind; they pretend that mandatory anti-usury laws are merciful while suggesting the naked power of the state should be utilized to forcibly prevent voluntary transactions between consenting adults.

Again, Ms. Brown leads the charge. We've seen her ride off in so many different directions now that we hardly know where she will head next. But the threnody – the underlying tonality of her message and those of her supporters and colleagues – is that monetary systems need to be installed by force and expanded by stealth.

After Thoughts

There is surely room for competitive monetary systems in the world and also for historical money forms such as gold and silver. But we've read enough about the kinds of alternative fiat systems that Ms. Brown and others are proposing to know that the real dream is bigger. It is one of monopoly money controlled by the state at the behest of even higher and more secret authorities.