WEBVTT 00:00.000 --> 00:04.300 John Adams remarked that there are two ways to enslave a nation. One is with the 00:04.300 --> 00:10.960 sword, the other is with debt. Americans are surely awash in debt. My guest Ellen 00:10.960 --> 00:16.920 Brown authored the runaway bestseller Web of Debt. Her book challenges widely 00:16.920 --> 00:22.480 held beliefs about our economy and our freedom. In essence, a handful of king 00:22.480 --> 00:28.440 bankers control it all. We explore how private parties, not our government, 00:28.440 --> 00:34.960 control America's money supply. Banking in America has become a cruel hoax acting 00:34.960 --> 00:39.760 as a giant betting machine. Still there is a path to prosperity and freedom, 00:39.760 --> 00:45.600 argues Miss Brown. It is my pleasure to welcome Web of Debt author Miss Ellen 00:45.600 --> 00:52.080 Brown to Moral Politics. Welcome, Ellen. Thank you, Bill. Now you have in the title of your 00:52.080 --> 00:58.240 book Web. What were you conveying by that? Are there spiders in an economic sense? 00:58.240 --> 01:04.480 Attacking us? The spider, the web is actually something that we're all trapped 01:04.480 --> 01:08.800 in and what's interesting is that everyone is trapped in it. Not just us as 01:08.800 --> 01:13.720 individuals but governments. Most people think governments issue our money. If 01:13.720 --> 01:17.960 they issue money, why are they in debt? They don't issue the money. It comes from 01:17.960 --> 01:23.400 a private banking cartel actually. But this goes to the fact that most 01:23.400 --> 01:27.680 Americans really don't understand American banking, do they? No and in fact 01:27.680 --> 01:32.120 bankers themselves don't necessarily understand how they create money and 01:32.120 --> 01:35.760 they'll argue with you that they don't but they do. Now is this been is this 01:35.760 --> 01:39.480 part of a deliberate ruse? You said that we've got a cruel hoax going. Is this 01:39.480 --> 01:43.560 part of that hoax? Is that it's been made deliberately complicated when it's 01:43.560 --> 01:49.320 really not? Certainly at some stage that would be true but I think now it's been 01:49.320 --> 01:55.800 so obscured in the thicket of misinformation. How is America's money made? 01:55.800 --> 02:01.160 Money that's made by the government is coins but that's only one ten thousandth 02:01.160 --> 02:05.520 of the money supply. The Constitution... One ten thousandth? Right it's like almost nothing. 02:05.520 --> 02:10.960 It's one billion dollars. The Constitution says Congress 02:10.960 --> 02:15.120 shall have the power to coin money and regulate the value thereof and that is 02:15.120 --> 02:20.240 all that Congress does, the coins and all of the rest including the dollar bills 02:20.240 --> 02:27.200 which are what we also think of as money are issued by banks. The dollar bills are 02:27.200 --> 02:32.440 issued by the Federal Reserve but it is actually private. It's composed of 12 02:32.440 --> 02:38.720 branches. If you look at your dollar bill you can tell which branch issued the 02:38.720 --> 02:42.680 bill so it's actually issued by the branches. All those branches are owned by 02:42.680 --> 02:47.320 the banks in their district only. The government does not own one share of 02:47.320 --> 02:54.960 one federal district. So before it was even popular we've been outsourcing the 02:54.960 --> 02:59.600 our economic most essential function the money supply to private interests. 02:59.600 --> 03:03.920 Exactly. Now this is a widely held misconception people don't know that 03:03.920 --> 03:10.200 basically banks just poof create money. Right well they created as credit. In 03:10.200 --> 03:14.720 other words when you go to a bank to take out a loan the bank will write into 03:14.720 --> 03:18.320 your account the amount of money that you want but they don't pull that from 03:18.320 --> 03:22.440 anywhere. That's just the debit on one side of their books and a credit on the 03:22.440 --> 03:26.160 other. They do it by double entry bookkeeping. They only need the deposits 03:26.160 --> 03:31.400 when they go to clear the check and then as the check goes out you know they need 03:31.400 --> 03:35.800 to balance their books so they have to have as much going out as coming in but 03:35.800 --> 03:40.840 they don't really lend the deposit. They borrow from that deposit pool but the 03:40.840 --> 03:45.440 deposits are always there. If you the depositor go in to get your money the 03:45.440 --> 03:50.520 bank never says come back in 30 years because we just lent your money to Mr. 03:50.520 --> 03:55.080 Smith. It's been lent out and yet you have access to it. Now what you just 03:55.080 --> 03:59.960 described is lending this bringing money into creation poof out of thin air 03:59.960 --> 04:04.680 double entry accounting where there's an asset balancing a liability is the bulk 04:04.680 --> 04:10.520 of the American money supply. Right. This is why people can have valuations on 04:10.520 --> 04:14.600 their homes but there's really not enough money to sustain all of that 04:14.600 --> 04:20.200 valuation is there. Right but actually it's good to have so much credit out 04:20.200 --> 04:23.920 there. I mean when the credit system collapses that's when we have a 04:23.920 --> 04:27.880 depression such as we have right now. What you described is indeed the 04:27.880 --> 04:32.960 fractional banking system. Is that correct? Right. And the unfortunate thing 04:32.960 --> 04:38.240 is that this could if not control lead to inflation. Really what inflation comes 04:38.240 --> 04:43.280 from when you create a loan and it's backed by a piece of real estate that 04:43.280 --> 04:49.160 that loan will get paid off. So that is not necessarily inflationary. What 04:49.160 --> 04:53.300 does inflate the system is when bankers speculate they're creating money that 04:53.300 --> 05:00.680 they're using for money making money. Becoming a casino a better machine as we've seen recently. 05:00.680 --> 05:06.720 How about the role of central banking? Was that done to protect the economy in 05:06.720 --> 05:12.880 some sense? In theory. What you have here is this basically a shell game 05:12.880 --> 05:16.920 going on by the bankers which is how money is created. It's not necessarily a 05:16.920 --> 05:21.200 bad system as I will argue. I mean if it were public it would be a good system 05:21.200 --> 05:26.640 but because it's private and there's this conception that money is a thing 05:26.640 --> 05:33.640 like gold. The bankers never had enough gold to create all these loans so they 05:33.640 --> 05:38.720 had to fabricate. So there's a certain fraud involved. So to keep 05:38.720 --> 05:45.080 this fraud up to keep the ruse that the shell game going the central banks were 05:45.080 --> 05:50.320 set up which had the function of printing money or creating money 05:50.320 --> 05:54.880 to backstop the banks. But now they're sort of blocked from doing that as well 05:54.880 --> 06:01.120 like look at the EU. So seeing the problem of their own making they created a 06:01.120 --> 06:04.960 solution of their own making that allows the same problem to perpetuate. 06:04.960 --> 06:10.640 In your book you mentioned that it's neither federal nor are there any 06:10.640 --> 06:15.880 reserves in the Federal Reserve. So they create this entity that is as you're 06:15.880 --> 06:23.880 describing a shell game. Are we in it for disaster? I think so. Well there are ways out 06:23.880 --> 06:29.200 and I think we're kind of finding our way to those ways. Like you look at 06:29.200 --> 06:34.240 the EU that's an unsustainable system but they are starting to create money 06:34.240 --> 06:37.280 because that's what they have to do. There has to be a release valve to allow 06:37.280 --> 06:42.800 this system to expand. Did Franklin Roosevelt take us off the gold standard 06:42.800 --> 06:48.680 because he was aware of what you just described? He took us off the gold 06:48.680 --> 06:54.240 standard because he had no choice. At that time everyone was afraid of the 06:54.240 --> 06:58.240 banks so they were rushing to the banks to pull out their gold. Well the dollar 06:58.240 --> 07:04.960 was 40% backed by gold. So you could take your dollars in. If you took two 07:04.960 --> 07:10.560 dollars, paper dollars in and took two dollars worth of gold out, three dollars 07:10.560 --> 07:14.920 would have to be called in in the way of loans. So the money supply was 07:14.920 --> 07:19.560 just contracting and contracting and so we had a huge depression. So in order to 07:19.560 --> 07:24.880 stop this implosion of the money system he took the dollar off the gold standard. 07:24.880 --> 07:28.880 And that's not a solution for us either, is it? Going back on a gold or silver 07:28.880 --> 07:32.800 standard or any kind of commodity based standard? No, it's never worked in the 07:32.800 --> 07:37.540 past despite what gold bugs will say. The Federal Reserve System is made up of 07:37.540 --> 07:42.160 private banks serving private interests. True, although you could argue the 07:42.160 --> 07:45.880 Federal Reserve Board is a different thing than the Federal Reserve 07:45.880 --> 07:50.240 banks. The Federal Reserve branches are all 100% private. The Federal Reserve 07:50.240 --> 07:55.560 Board is appointed by the President and confirmed by the Senate so it's 07:55.560 --> 08:03.480 definitely got a federal component to it. We know about Andy Jackson taking on the 08:03.480 --> 08:10.280 Second Bank of America and I believe the name Biddle was popular at that time 08:10.280 --> 08:16.040 opposing his effort. Biddle was the head of the Second US Bank which was quite 08:16.040 --> 08:20.600 corrupt. He said I will kill it before the bank kills me which he did. He did. He 08:20.600 --> 08:26.920 killed the bank, pulled all the money out. That's the last time that the debt 08:26.920 --> 08:32.120 has been fully paid off. Now we had Lincoln in the greenback. Can you 08:32.120 --> 08:37.360 describe that? That's another... Lincoln went back to the American system in other 08:37.360 --> 08:43.520 words. This is the system that was popularized by Ben Franklin. Yeah, he 08:43.520 --> 08:46.320 wrote about it. He didn't actually invent it but he wrote about it. It was actually 08:46.320 --> 08:51.480 the Quakers in Pennsylvania that developed the best of these models. 08:51.480 --> 08:59.280 Lincoln was faced with usurious interest rates in order to fund the Civil War and 08:59.280 --> 09:05.480 in fact there is some evidence that the Rothschild bankers were that they 09:05.480 --> 09:11.640 actually stimulated this war in order to trap the colonies back in debt in order 09:11.640 --> 09:18.480 to have economic colonialism where they had lost their political colonies. 09:18.480 --> 09:25.960 So to avoid these very high interest rates he issued US notes or greenbacks 09:25.960 --> 09:31.160 and did manage to win the war and did a lot of development besides the railroads 09:31.160 --> 09:34.080 that went all the way across the country. It was a very active period of 09:34.080 --> 09:41.560 development but he was assassinated and that whole thing was terminated. And the private bankers reclaimed our American bankers. 09:41.560 --> 09:45.960 Now you mentioned Rothschild. Everybody knows that name and what's 09:45.960 --> 09:49.720 interesting in your book is that it was a shocker to me. I didn't know that 09:49.720 --> 09:54.240 Rockefeller was so intimate in early American banking along with the 09:54.240 --> 09:59.240 House of Morgan. JP Morgan and the House of Morgan. And there's another name that 09:59.240 --> 10:04.480 people probably don't know. Aldrich who was the grandfather of Nelson Rockefeller, 10:04.480 --> 10:14.480 the vice president under Jerry Ford. A very powerful man. Wasn't it Aldrich who linked up with the Rothschilds? 10:14.480 --> 10:23.480 Aldrich brought the first Federal Reserve bill and it was called the Aldrich bill and he was a relative. 10:23.480 --> 10:30.480 And Rockefeller and Morgan both were funded by the Rothschild. I mean there is evidence that they were both funded by the Rothschild bankers. 10:30.480 --> 10:38.480 Rothschild of course was Jewish and at that time that was, that impaired his ability to deal with. 10:38.480 --> 10:45.480 So Morgan was a good Protestant front for him. 10:45.480 --> 10:50.480 The influence by the Rothschild still continue in the American banking system? 10:50.480 --> 10:59.480 It's hard to know who the head of the spider is now. It is said that the spider moved across the Atlantic to 10:59.480 --> 11:06.480 the Rockefellers that the American banking system is now stronger than the city of London but I doubt it. 11:06.480 --> 11:09.480 I mean I think that it all still goes back to the city of London. 11:09.480 --> 11:16.480 There is a need to expand the economy. We certainly don't want it to implode by not having productive lending. 11:16.480 --> 11:22.480 I guess that's the important term, productive lending. How would you describe a productive loan? 11:22.480 --> 11:26.480 Well my own solution to all this would be that the banks would be publicly owned. 11:26.480 --> 11:35.480 So lending is a good thing and in fact all of our money comes from loans, virtually all of it. 11:35.480 --> 11:41.480 And it is a very natural organic system. In other words, people take out loans when they want to do something, 11:41.480 --> 11:47.480 build something or whatever and then as they pay the loan off the money supply contracts again. 11:47.480 --> 11:52.480 So the money supply expands and contracts naturally in response to the need for credit. 11:52.480 --> 12:01.480 So that's a good thing. The only bad thing about the system is that it is privately owned by bankers pretending to have money they don't have. 12:01.480 --> 12:07.480 So not only is that bad in the sense that it gives a certain cartel power over the whole money scheme, 12:07.480 --> 12:11.480 but it is bad for the bankers themselves because they are always getting into trouble. 12:11.480 --> 12:19.480 I mean historically this system goes back for a thousand years and in fact when they were really strict about, 12:19.480 --> 12:27.480 in the Italian bankers there was one Italian banker who was actually beheaded in front of his bank because he couldn't balance his books. 12:27.480 --> 12:33.480 If only we could do that again. No. There is a role of interest. 12:33.480 --> 12:38.480 Interest could be part of a sustainable system if it is a public system. 12:38.480 --> 12:45.480 In fact there are many money reformers who will argue that the debt virus theory has been debunked. 12:45.480 --> 12:49.480 So their argument is that the bankers put the interest back into the system. 12:49.480 --> 12:54.480 They buy shoes and they buy food and they spend like everybody else. They spend their profits. 12:54.480 --> 13:00.480 But the problem is they don't. It is the 1% versus the 99% thing. They reinvest their profits. 13:00.480 --> 13:03.480 They have far more money than they can spend. 13:03.480 --> 13:13.480 So not counting this mathematical issue of you have got to have an expanding debt in order to pay the interest, 13:13.480 --> 13:15.480 they put their money into investments. 13:15.480 --> 13:24.480 So instead of saying here is my dollar, give me some food, they say here is my dollar, give it back to me with interest or give it back to me with more profit. 13:24.480 --> 13:35.480 It is not really just interest. It is any form of rentier money making money that is this parasite that is pulling the money off the top and that is why the 1% is game. 13:35.480 --> 13:38.480 This is the basis of the Ponzi scheme that you talk about. 13:38.480 --> 13:44.480 Money is created but only the principle is created, not the interest for that principle. 13:44.480 --> 13:49.480 It is never created so it depends on further lending. 13:49.480 --> 13:53.480 The system where the government itself is able to print some money, they can print the interest. 13:53.480 --> 13:57.480 So they can put some debt free money into the system to cover the interest. 13:57.480 --> 14:04.480 But a bank can't because all their money goes out there as interest bearing debt. 14:04.480 --> 14:10.480 Well we know on the basis of households it is clear, but on the basis of the national economy, 14:10.480 --> 14:20.480 is it clear that we will reach a time where we cannot service our debt, the interest will prevent us from, we can't even service the interest on the debt. 14:20.480 --> 14:28.480 Yeah, well that would be true if we had, like if we were still paying 5% interest like we did at one time, we would already be at the point where we couldn't afford the interest. 14:28.480 --> 14:35.480 But in fact that is why interest rates have been dropped so low, they are down to like 0.2% for the Fed funds right. 14:35.480 --> 14:45.480 They are almost nothing and they have to hold them ridiculously low because the federal debt has grown by 50% since this banking collapse. 14:45.480 --> 14:52.480 But you could service the debt, I mean if you borrowed from your own central bank interest free, 14:52.480 --> 14:56.480 then it doesn't really matter the size of the debt, you just keep rolling over the debt. 14:56.480 --> 14:58.480 It is the interest that will kill you. 14:58.480 --> 15:05.480 So you are saying there is some artificiality that is holding or suppressing our interest, keeping it at near zero levels, 15:05.480 --> 15:08.480 so basically the government doesn't suffer a calamity. 15:08.480 --> 15:16.480 Yeah, if you could have zero interest the government debt can respond to the needs of the economy, which I think is a good thing. 15:16.480 --> 15:21.480 Zero interest is not sustainable, I mean is it? Aren't we basically just holding on? 15:21.480 --> 15:25.480 Well zero interest means borrowing from the Fed and they return the money. 15:25.480 --> 15:34.480 Good point. Some of what we talked about, deflation, the fact that things are contracting. 15:34.480 --> 15:40.480 We are not seeing lending. We don't see the productive activity. Even though there is a need for it, we don't see it. 15:40.480 --> 15:47.480 In fact many people that are written in Forbes that have been on Charlie Rose, there is a hedge fund multi-billionaire that is saying 15:47.480 --> 15:52.480 the future is a deflationary future and by deflation that is the opposite of inflation. 15:52.480 --> 15:55.480 We know there is not much evidence of inflation today. 15:55.480 --> 16:03.480 We are in a deflationary cycle. There is this entire shadow banking system that goes unreported 16:03.480 --> 16:10.480 and that was the system that shrank in 2008 and according to the Fed's own figures it shrank by five trillion dollars. 16:10.480 --> 16:12.480 Shadow banking system, what is it? 16:12.480 --> 16:15.480 It is non-bank. 16:15.480 --> 16:17.480 Goldman Sachs? 16:17.480 --> 16:25.480 It was the Goldman Sachs until they became a bank but it includes investment banks, hedge funds, money market funds. 16:25.480 --> 16:32.480 This whole system, supposedly it developed or one reason it is so big is that big institutional investors 16:32.480 --> 16:39.480 don't want to put their money in a bank because they are only insured for 250,000 dollars and they have far more than that. 16:39.480 --> 16:44.480 So they want something that is like a bank. They want to be able to pull their money out daily. 16:44.480 --> 16:51.480 So that is the whole repo market where it is like a big pawn shop where they say I will give you my money for a day 16:51.480 --> 16:56.480 and you give me those mortgage backed securities but I can give you back the mortgage backed securities 16:56.480 --> 16:59.480 and you have to give me back my money tomorrow if I want it. 16:59.480 --> 17:03.480 And that is what happened in 2008. The money market collapsed. 17:03.480 --> 17:07.480 All the investors panicked and they pulled their money out at once overnight. 17:07.480 --> 17:15.480 So it is a very unstable system. It shrank by 5 trillion suddenly and it has only come up by 1 trillion. 17:15.480 --> 17:27.480 And if this continues again, this is the paradox of thrift, the liquidity crisis or the death spiral all under the rubric deflation. 17:27.480 --> 17:28.480 Right. 17:28.480 --> 17:30.480 Is there a way out of it? 17:30.480 --> 17:34.480 Inflate. Put some money back into it. 17:34.480 --> 17:36.480 For some lending is what? 17:36.480 --> 17:45.480 Yeah. Well, ideally I just wrote an article on student debt would be a very nice way to get another trillion dollars into the system. 17:45.480 --> 17:50.480 There is now a trillion dollars in student debt outstanding. 17:50.480 --> 17:58.480 When the Federal Reserve did its quantitative easing 1, what they did was 1.3 trillion in mortgage backed securities 17:58.480 --> 18:01.480 or toxic assets were bought off the books of the banks. 18:01.480 --> 18:05.480 So the banks got the dollars and the Fed got the toxic assets. 18:05.480 --> 18:07.480 They gave them at face value? 18:07.480 --> 18:13.480 No, actually they got a deal on it. The Fed actually made money on that deal even though everybody said that. 18:13.480 --> 18:16.480 But isn't that going to contract the economy if you mark to market? 18:16.480 --> 18:22.480 Basically that means that the reserve limits or reserve requirements are met. 18:22.480 --> 18:26.480 The lending amount that banks can make contracts. 18:26.480 --> 18:28.480 The whole point, they gave them dollars. 18:28.480 --> 18:34.480 So now they didn't have toxic assets on their books. They now had dollars on their books so they could lend again theoretically. 18:34.480 --> 18:39.480 It didn't work obviously. For another reason I think it's because... 18:39.480 --> 18:44.480 Maybe they helped America refinance their home program either. 18:44.480 --> 18:54.480 But the Fed did it so they could just as well buy a trillion dollars in acid backed securities backed by student loans and then just rip them up. 18:54.480 --> 19:02.480 And there would be another trillion dollars in the system and the students would basically get free higher education which I think we should have been giving all along. 19:02.480 --> 19:05.480 But that's a hidden tax on the American public isn't it? 19:05.480 --> 19:16.480 No, not if you're in a deflationary cycle. If things worked really well when we had five trillion dollars more in the system and we suddenly took that five trillion dollars out. 19:16.480 --> 19:18.480 We've got to put some more money back in there. 19:18.480 --> 19:29.480 Now the question is how to do it. They tried doing it by putting it on the books of the banks and it didn't work because there's still 1.6 trillion in excess reserves sitting on the books of the Wall Street banks. 19:29.480 --> 19:33.480 Not the local banks. The local banks can't get it. It's the Wall Street banks. 19:33.480 --> 19:39.480 So what if we gave a trillion dollars to the municipal governments or the states? 19:39.480 --> 19:47.480 It would only take 200 billion to bail out all the states, to balance the books of all the states or the students. 19:47.480 --> 19:54.480 But to do that we have to borrow that money the way the system works today. The present system. We have to borrow that and pay the interest to private interests. 19:54.480 --> 20:02.480 That's what the Treasury would have to do or the Congress. But the Fed does not have to borrow. They can just issue the money. They have the power. 20:02.480 --> 20:06.480 They have the fiat power to just issue money. And they're looking for it. 20:06.480 --> 20:10.480 And again I want to make the point here. You said create money not create debt. 20:10.480 --> 20:11.480 Right. 20:11.480 --> 20:21.480 Okay. We keep talking about they. We refer to the Fed. Who's doing this? Who are these shadow bankers? Who controls this? Who owns it all? 20:21.480 --> 20:30.480 Well if you trace it back historically there were some key players that set the system up and made it work the way it does. 20:30.480 --> 20:37.480 But today people don't really understand the system. They just they see an opportunity to make money. 20:37.480 --> 20:42.480 I mean all those people on Wall Street are just think that this is a good way to make money. 20:42.480 --> 20:43.480 They're speculators. 20:43.480 --> 20:51.480 Yeah. And they just jump in and do it. So they see a hole in the system and they go in and make money off it. It's driven by greed. 20:51.480 --> 20:55.480 But it's legal greed and everybody kind of looks up to these rich bankers. 20:55.480 --> 20:58.480 But we could fix that though. Can we like change the rules? 20:58.480 --> 21:09.480 Yeah. So we need to change the system. Yeah. If you bumped off all the or if you put in jail all the guilty parties you wouldn't have fixed the system. 21:09.480 --> 21:13.480 Yeah. And you can't put them in jail because it's not even illegal. 21:13.480 --> 21:17.480 But if we made it illegal that would go a long ways towards fixing some of the problems. 21:17.480 --> 21:19.480 Yeah. That's what you have to do is fix the system. 21:19.480 --> 21:29.480 So it's this amalgam of opportunists which we'll call speculators. These are people that have bet against weak currencies like George Soros did in one time. 21:29.480 --> 21:32.480 What about the central bankers as a group? 21:32.480 --> 21:41.480 Well, Ben Bernanke for instance was a professor of economics and just got appointed. I don't see him as somebody who's scheming to pull off something. 21:41.480 --> 21:53.480 No. I could envision that there are people scheming at the Bank for International Settlements because they have pretty much broken one economy after another by imposing their rules. 21:53.480 --> 21:55.480 I mean the first... 21:55.480 --> 21:58.480 And most people don't even know what the Bank of International Settlements is. 21:58.480 --> 22:06.480 No. They kept a low profile for a long time until they decided they wanted a bigger building and they built this boot, you know, the famous boot in Basel. 22:06.480 --> 22:11.480 The Bilderbergers are clearly a day. They meet once a year and they are... 22:11.480 --> 22:15.480 Can we get the membership of the Bilderbergers? 22:15.480 --> 22:22.480 There are infiltrators who report on it but nothing's official on that, that they see people going in and out. 22:22.480 --> 22:29.480 Are there Rothschilds that we can look to and say that they are the spider that crossed the Atlantic? 22:29.480 --> 22:36.480 Nobody really knows how much money they have or what they're up to but you couldn't really nail them. 22:36.480 --> 22:45.480 To some extent aren't we really touching on a dicey issue here of class war, the 99% versus the 1%? 22:45.480 --> 22:52.480 Yeah. But so to me the solution would be to set up our own system. I mean we can't really get them. 22:52.480 --> 22:59.480 What we need to do is set up a model that works better, set up a better mousetrap and then everybody will just gravitate to that one. 22:59.480 --> 23:06.480 And then when we realize that the too big to fails are not too big to fail, let them fail. We have our own more functional system. 23:06.480 --> 23:10.480 Well that's interesting because I'd like to hear how you would solve the problem. 23:10.480 --> 23:15.480 I know that there's a deflationary threat out there. We need to get the system going. 23:15.480 --> 23:25.480 And the social contract seems to be broken. We see pensions under attack, health guarantees, health care guarantees under attack. 23:25.480 --> 23:33.480 Even social security, Medicare is under attack because there are insufficient resources there for that. 23:33.480 --> 23:37.480 Didn't Greece just sell off an island? 23:37.480 --> 23:45.480 They imposed some austerity on our earth in the terms of taking the treasures, those antiquities. 23:45.480 --> 23:52.480 And they're threatening to actually put in a military, like a police force that will enforce this. 23:52.480 --> 23:57.480 They're going to take over those governments. They've abandoned their sovereignty because of debt. 23:57.480 --> 24:02.480 This could be America's future without some austerity program if we don't find a solution. 24:02.480 --> 24:10.480 Yeah, well actually it would be stupidity on our part if we let it happen to us because we do have the power. 24:10.480 --> 24:13.480 Our federal, our central bank has the power to issue money. 24:13.480 --> 24:17.480 And it should be issuing money and lending it to the government. 24:17.480 --> 24:23.480 But because we have this whole faction that's refusing to allow the debt to expand, 24:23.480 --> 24:30.480 we have an artificial austerity being imposed on ourselves that we don't need to impose because we can fix it. 24:30.480 --> 24:37.480 So it would be good if the debt cap were removed and that we grew the economy through debt. 24:37.480 --> 24:41.480 Exactly, because you need a certain amount of money in the system. 24:41.480 --> 24:48.480 All money comes from debt. When private debt shrinks, public debt has to expand to fill up the gap. 24:48.480 --> 24:53.480 So you want the money supply to match the GDP. 24:53.480 --> 24:57.480 So if you want the GDP to expand, you have to expand the money supply. 24:57.480 --> 25:01.480 Doesn't everyone know that our debt will never be repaid? 25:01.480 --> 25:06.480 And we're even faced with a problem now of servicing the debt. The interest on the debt, rather. 25:06.480 --> 25:09.480 Yeah, well it's the servicing that's the problem. 25:09.480 --> 25:13.480 If you got rid of the interest and you just allowed the debt to expand as needed. 25:13.480 --> 25:20.480 So going forward we get rid of paying interest on debt and then we deal with the debt and the interest that we have now by growing the economy. 25:20.480 --> 25:29.480 What you could do ideally, everybody thinks this would be inflationary, but I would argue it's not, is you could print or coin. 25:29.480 --> 25:32.480 You could do this right now without changing any laws. 25:32.480 --> 25:44.480 Coin 14 $1 trillion coins, put them in the Treasury's bank account with the Fed and just buy back all those bonds and rip them up. 25:44.480 --> 25:50.480 So all the current bondholders would now have dollars. 25:50.480 --> 25:58.480 All a bond is, a federal bond is just an interest bearing account with the Fed and a dollar is a non-interest bearing account. 25:58.480 --> 26:01.480 So you'd get rid of the interest in that way. 26:01.480 --> 26:04.480 So instead of borrowing we just fiat the money into creation. 26:04.480 --> 26:12.480 I believe it was Thomas Edison that you quoted in your book that if we can create a dollar bond we can create a dollar bill. 26:12.480 --> 26:15.480 That's basically the argument that you're making right there. 26:15.480 --> 26:20.480 What about the constitutional authority over the currency? 26:20.480 --> 26:26.480 Is the Constitution specific about where that prerogative lies? 26:26.480 --> 26:31.480 Well that itself is controversial and there are cases going both ways. 26:31.480 --> 26:39.480 It's been argued for 200 years, but the Constitution says Congress shall have the power to coin money and regulate the value thereof. 26:39.480 --> 26:49.480 Now the argument, the gold bug types say, well that just means that you can take your coins to the mint and Congress will put the stamp on it. 26:49.480 --> 26:52.480 That's what coining money means. 26:52.480 --> 26:59.480 The other argument is that coins were the official money at that time and they didn't have checks and credit cards and all this stuff. 26:59.480 --> 27:11.480 So what they meant was Congress shall have the power to create the money supply. You have to read that into it to meet the current circumstances 200 years later. 27:11.480 --> 27:18.480 Debt into dollars, which is what you recommend, we can regulate all of this financial engineering. 27:18.480 --> 27:25.480 We can take back our money supply from private banking selfish interests. 27:25.480 --> 27:32.480 Which has been basically the root of the class war for the whole time of our republic. 27:32.480 --> 27:38.480 Ellen, I want to thank you for a very enlightening and interesting talk on the economy. 27:38.480 --> 27:42.480 There are many things I didn't know. I have an MBA and I didn't know so many things about our economy. 27:42.480 --> 27:54.480 Well I've got full faith and credit in a lot of the really sensible down to earth and very simplified banking proposals that you made. 27:54.480 --> 27:58.480 Again, I want to thank you for being my guest on Moral Politics. It's been a pleasure. 27:58.480 --> 28:25.480 Thanks, Gretchen.