STAFF NEWS & ANALYSIS
Debriefing a Sovereign Money Hater
By Staff News & Analysis - October 29, 2010

In 1750, this New England was very prosperous. Benjamin Franklin wrote: "There was abundance in the Colonies, and peace reigned on every border. It was difficult, even impossible, to find a happier and more prosperous nation on all the surface of the globe. Comfort prevailed in every home. The people, in general, kept the highest moral standards, and education was widely spread." When Franklin went over to England to represent the interests of the Colonies, he saw a completely different situation; the working population of the home country was gnawed by hunger and plagued by inescapable poverty. … People in London asked Franklin how the American Colonies managed to collect enough money to support their poorhouses, and how they could overcome this plague of unemployment and pauperism. …. Thanks to debt-free money issued by the colonial governments … Franklin replied; "We have no poorhouses in the Colonies, and if we had some, there would be no one to put in them, since in the Colonies there is not a single unemployed person, not a beggar nor a tramp." … And Franklin told them: " In the Colonies, we issue our own paper money. It's called 'Colonial Scrip.' We issue it to pay the government's approved expenses and charities. We make sure it's issued in proper proportion to make the goods pass easily from the producers to the consumers. In other words, we make sure there is always adequate money in circulation for the needs of the economy. – No-debts.com

Dominant Social Theme: Money power is everywhere and most pernicious. The only solution is sovereign money pumped out by the US Treasury and states and maybe municipalities.

Free-Market Analysis: We just had an argument with a furious friend of ours and since we are tired of being shouted at, we will now present the argument of our friend and the crux of his cranky argument. It is a little like lancing a boil, we suppose. Please bear in mind, by the way, that the following is a summary and we have used our own words to paraphrase what he told us (while spluttering). He really should calm down. We'll get it all out and then we won't have to write about it anymore – or listen to it either! Here goes. (We apologize in advance to anyone who is offended; we're not sure what to believe about his claims anyway.)

"You elves at the Daily Bell [our friend was speaking sarcastically] think you are so clever but the powers that be have long anticipated the arguments you have been making. You would never come out and say that some of the leaders who advance the argument of sovereign money are seemingly sponsored by US intelligence or how the sovereign money movement is suddenly springing up like crazy just the way every other promotion does when they get it going.

"Why have you never pointed out that every part of the sovereign money argument is crafted to provide a statist solution – that state or local banks should print non-debt money and choose how to circulate it to the local community? When have you ever clearly come out and said that the power to print money is the power to destroy as surely as taxation is a similar destructive power? When have you ever pointed out bluntly that the entire argument is crafted to blame the bankers while avoiding putting any blame on government. And why haven't you made the point clearly that when entities other than the market itself have the power to issue money TOO MUCH IS NEVER ENOUGH. Only the market itself can regulate the quantity of money. No state or central bank can do that because no one knows what the future holds or how much money will be needed. Benjamin Franklin was wrong!

"It doesn't seem to matter though. You've held your tongue – or been overly polite anyway – and so have others. And now it's an explosion on the 'Net. All these people out of nowhere starting sites, babbling about Frank Baum and the Wizard of Oz and the yellow-brick road to debt-free banks. All power to the people and down with the banksters! An explosion of websites and people seemingly committed to the movement of sovereign money. A lot of them using military terminology too. And with "pledges" just like the Tea Party pledges after it was taken over from the Libertarians by Armey and Palin. Where'd those come from?

"It's how these promotions work, Daily Bell. It's all very clever and very contemptuous. They are sure we can be manipulated – and have years of data and experience to prove it. You know it, Daily Bell! They find people – usually military people – and help them make the right presentations. It is phony but it makes it look like there is a swelling movement. And it is a phony movement and the sovereign money is a phony solution. But still they appear out of nowhere with videos and articles and websites and suddenly they are all over the place, apologizing for their former beliefs and using free-market rhetoric to argue for statist solutions. And all the videos are sort of the same! And all the rhetoric is the same! You'd have to be blind not to spot a "pattern."

"In fact, the powers-that-be would love the US and the world to move toward sovereign money! They work like a kind of mafia and are always trying something new. Think about it: If states or the US Treasury begin to print sovereign money, Leviathan will STILL be in charge of the printing press. Do you really think the powerful families – your perspective – that seem to run the world will have any trouble influencing the government as its prints more money? They could care less if it's "debt money" or not, just so long as they stil control the printing presses. Do you really think the money won't end up in THEIR pockets? The one thing they DO control is government.

"It's being orchestrated! That's how these things work. You will notice also how they always cite people like Martin Luther King and Abraham Lincoln and even John F. Kennedy. Always the same names! They aren't concerned with the truth, only a facsimile of it. They criticize but then they reinforce the credibility of some iconic US political figures. They point fingers at the "bankers" but then offer up American politicians as praiseworthy role models. And how is that possible? Abraham Lincoln arrested anyone who disagreed with his unnecessary war – without constitutional authority or justification. Martin Luther King was apparently adopting radical communist views toward the end of his life, and who knows what Kennedy thought – but he was no icon of free-market thinking as you term it.

"This is a very nefarious promotion. But except for Gary North it's been pretty much ignored by the Libertarian movement (some of whom are sympathetic) but it's been in play for at least a decade now. If you read the recent literature they've even adopted terms used by YOUR Daily Bell blog – terms like New Renaissance and New Enlightenment. But it's all scam. You know it is! They claim the Fed is a private institution and then claim the bankers control it. Well, the Fed wouldn't be authorized to do what it does without the force of government behind it. But they skip that part because they don't want to paint government as corrupt or untrustworthy. More recently, if you listen to their arguments, they've even started to criticize government. But they'll always be careful to say that government doesn't work because of the bankers and big corporations.

"They'll never talk about the wealthy families BEHIND the corporations and bankers. No, that's conspiratorial thinking. We're supposed to blame Wall Street. It's the "system" that's gone wrong. And the system can be fixed if "the people" take control and institute "sovereign money." Not a free-market system of gold and silver but exactly the reverse. A system in which GOVERNMENT IS STILL IN CHARGE OF MONEY but in which the governors are supposed to be provided by "the people." What a joke. What a promotion. And why is it gaining momentum? Because people like the Daily Bell aren't speaking out.

"It's a promotion. Yes it is. They're that SMART. Sure they are! They hire the best communicators. They use the most sophisticated ideas of the day and then twist them to gain or regain power. It's crystal clear now, Daily Bell. You've documented it yourselves, though you won't take it to the natural conclusion. The IMF proposes one set of global money solutions while some sort of homegrown US sovereign money movement proposes another. That's how they work! They never offer just one idea. They come at it from a number of directions to see what sticks. And they're ramping up every type of money promotion – that's very obvious – to keep control.

"C'mon, now! Who studies money for years and then comes up with the idea that government should control it? Who looks at the broad sweep of history and figures out that if money were printed DIFFERENTLY (but still by government) the outcome would be different? And why do they always have military backgrounds, these geniuses that appear out of the blue?

"I dare you to print this Daily Bell!"

All right. Calm down. Presumably we don't have to listen to YOUR rants, anymore. We have presented the gist of your argument; if you want to repeat it you can go elsewhere. Anyway, in our defense, we have taken on the sovereign money movement many times and made our points about it. We don't believe that more government is the answer to anything. We believe in less government. We don't believe government should be printing money at all, ever. It is inevitably inflationary – the sovereign money folks (it is true) get around this point by redefining what inflation is and claiming that it is not a monetary phenomenon.

The main point, in fact, against sovereign money is that so long as money is issued out of manmade entities, the amount of money being printed will always exceed what is necessary. That is just human nature. Leaving aside all the rest of it (see above) which may be most questionable, the crux issue remains as with the central banks – how does an entity other than the market decide how much money is enough or too much? If there is no price competition, there is no way to determine the volume of money that should be in circulation. This would be the downfall of sovereign money in our view.

Edited on date of publication

After Thoughts

Having said all this we also believe that many in the growing sovereign money movement have their hearts in the right place and are sincerely concerned for the country – and want what's best. That could include the leadership of the sovereign money movement. Who are we to judge? In fact, we apologize once more to any who have been insulted by the above, or have had their feelings hurt. But we don't want to be shouted at over the phone anymore. So we have presented the above as a service partially for our own ears!

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