The American Monetary Institute Conference of 2005

Stephen Zarlenga


[Reprinted from GroundSwell, January-February 2006]


Stephen Zarlenga is Director of the American Monetary Institute, website http://www.monetary.org. The AMI is dedicated to the independent study of monetary history, theory and reform. For related articles see January-February 2003 GroundSwell: "Henry George and Monetary Reform,". Stephen Zarlenga's presentation made at the 2002 CGO Conference in London, Ontario, Canada, and also book review of "The Lost Science of Money."

Seventy five people came to the 2005 AMI Monetary Reform Conference held in Chicago from September 29th to October 2nd, 2005. The conference page is at www.monetary.org/2005conference page

Keynote Speaker Congressman Dennis Kucinich Inspired the Participants

Congressman Dennis Kucinich's Keynote address emphasized the importance of thinking in terms of what can be, not just what is; and of the potential importance of having this monetary tool available not just to solve pressing problems but to start building a wonderful future on Earth. He stressed the need of bringing this discussion to Washington, to re-examine and look again at the problems caused by fractional reserves and at why this great power was turned over to the Federal Reserve System. His inspiring video can be viewed in its entirety at our homepage.

Brief Summary of the Monetary Reform Significance of Each Speakers Talk:

Stephen Zarlenga's opening remarks set forth the agenda and goals of the conference. He pointed out that monetary reformers have known for decades what general shape money reform should take -- away from privately created money loaned into circulation as interest bearing loans and credits, toward governmentally issued money spent into circulation interest free. He noted that the present infrastructure situation requires money be spent on much needed repairs which have gone ignored for decades. Monetary reform makes this possible. He pointed out that the conference would focus on 3 areas: The monetary Reforms; How to achieve them politically; and What they could be used for once achieved. He set out the conference general guidelines for politeness and keeping the questions on point. The Panel on the Federal Reserve System underscored the problem and mechanism of how money is currently created by the private fractional reserve banking system and how this is not consistent with our democratic republic form of government, or good common sense.

Ole Mackeprang, European financier presented a picture of how the Euro has already changed daily life in the European Community and how this currency went from "dead on arrival" to dominating the US $ in a few short years, so that there are now two world class currencies in existence -- a major new geopolitical development. Alistair McConnachie talked on the 1946 nationalization of the Bank of England and demonstrated it is not enough to just nationalize the central bank if the private banking system keeps the privilege to issue money. This privilege has led to the current situation where the British government only creates 3% of the money and the private banks are creating the other 97% at interest, and are engaged in an orgy of privatization. He described the new British political party being organized to specifically promote money reform.

James Gibb Stuart's presentation by video underscored the great importance of correct money views, describing how just one letter requested by the Malayasian Prime Minister from English money reformers altered the course of Malaysia's history and rescued that country from the worst effects of the 1997 Asian currency crisis brought on by speculators.

William Krehm of Comer described the situation with Canadian monetary reform and the Bank of Canada already being a nationally owned bank. William was one of the few people present who supports allowing banks to continue creating money, but under some alternative regulations that he believes would restrict the abuses of privileged money creation powers.

Connie Fogal, leader of the Canada Action Party, founded by Paul Hellyer, which supports monetary reform, passionately described in detail the provisions of the nationalized Bank of Canada legislation which actually give it the power to do what the AMI considers necessary for money reform. However, because the private banks are still allowed to create Canadian money, these powers have been ignored, and allowed to be usurped by the private banking establishment. More strong evidence that nationalization of the central bank isn't enough to achieve monetary justice.

John Herman of Australia gave a report on the money reform situation "Down under." The same system of private bank created purchasing media loaned into circulation at interest, also dominates there, as well as in Europe, even though central banks have been nationalized. Indeed America's Federal Reserve System appears to be the only major central banking system still under private ownership and private control.

William Hixson succinctly presented the problems with introducing money at interest through the private Federal Reserve System, and demonstrated that the idea of a gold standard had always been a sham. It had to be because gold production could never be sufficient; and he described why it was never a good idea even if there were gold available. He proposed the federal Government issue the money, and even make some of it directly available for State governments use.

Prof. Robert Blaine gave an account of how debt has been growing right from the founding of our country in basing our money system on bank issued debt rather than government issued money. This thorough presentation with charts gives documentary evidence of the inexorable nature of this flawed process and how it has led us to the present debt malaise. The talk demonstrated the long term effects of our defective debt based money system leading toward an impossible debt equation for society.

David I. Kelley, Issues Advisor to Congressman Dennis Kucinich' presidential campaign, gave a rousing presentation of the "Forbidden Statistics" demonstrating the unacceptable concentration of wealth in our society -- One of the unanswerable indictments of our present money system and a further demonstration of the unacceptability of the inevitable results of privately controlled money systems. This was among our most acclaimed talks judging by participant evaluation sheets.

Ben Gisin, Advisor to the AMI, discussed the approaching food crisis emanating from the inadvisable way our society allows money to be created privately and circulated as interest bearing debt. A "must see" presentation of this hitherto ignored aspect of the money problem. It's not just abstract debt claims that are plaguing us, the money system is already degrading humanity's ability to get good agricultural nourishment.

Cay Hehner's presentation critiqued Adam Smith and Karl Marx as not having done their homework. Smith put together a jumbled mass of poorly defined concepts, which essentially ignored morality and Karl Marx sensing the need for morality, esssentially turned Smith's jumbled mess upside down. Neither provided a viable approach for humanity. Both used the same erroneous metallist concept of money.

Prof. Nic Tideman's presentation on using housebricks as the ultimate form of commodity money made a very outstanding point: those who claim to want commodity backing for money should be considering housebricks, rather than the normally discussed gold and silver. What it really means is that the goldbugs are not so much for commodity backing as they are for promoting fetish gold, connected with their coin collections and gold shares, etc. They forget that everything that makes gold a good investment makes it no good as money.

Dr. J.W. Smith's presentation on Adam Smith vs Frederich Liszt made the important point that nations have been built using Liszts system, but never with Adam Smith's system. Adam Smith is still worshipped as a god in the economics community, but you cannot have both Adam Smith and economic justice at the same time. It must be one or the other and it is past time to cut Adam Smith down to size.

Jack Bidell showed how the standard method of trying to fight inflation by raising interest rates is a perverse policy that actually increases inflation in a world where debt and interest payments form such a large part of economic activity -- a concept that Alan Greenspan never grasped while head of the Fed. Since they are wrong about this -- their main tool, imagine the other errors and inniquities that are built into the system.

Dan Sullivan presented Henry George's viewpoint that society must share and protect a modern "commons" in both land ownership and in the monetary area. Values in both areas that result from our actions as a society rightly belong to all of us and should not be alienated.

Randy Cook showed that the shortfall in actual money payments to raw material producers is roughly equivalent to the total debt in our society, as the raw materials were exchanged for debt instead of for money. A fascinating concept that deserves deeper analysis.

John V. O'Holleran described a bleak picture of America's deteriorating infrastructure situation, now requiring over $1.6 trillion dollars in repair work, to raise it from its current "D" rating up to acceptable levels. The outlook is that it will reach D- soon. This infrastructure problem, in AMI's view represents an unanswerable indictment of the present monetary system, which has been unable or unwilling to address America's infrastructure needs.

Ken Bohnsack described his years of experience in getting over 3,000 signatures of support for the Sovereignty proposal, from governmental bodies from school boards to states. His enthusiastic presentation energized the audience - especially his attitude that in this process one might get disappointed, but never discouraged.

Charles Walter's talk described how the parity payments system had worked well for so many years in assuring farmers that they would be able to at least approximate getting their costs of production back for crops produced under reasonable conditions. This talk along with Randy Cook's provide some of the key elements of monetary information for reasonable monetary management and control as envisaged in the American Monetary Act.

Richard Distlehorst demonstrated statistically that we know about how much money will be created per year by recent standards, and that we then have a choice -- to give the banks the privilege to create this money and lend it back to us at interest, or to have our own government create it interest -free and spend it into circulation to promote the general welfare. He left no doubt which choice we should make!

J. Edward Andersons presentation of Public Rapid Transit systems was a view into the future of congestion free, environmental friendly, efficient, time saving transport which is clearly the main answer to remaking our cities into liveable sensible environments. Step inside the cars, press a button for your destination and sit back and relax, read, doze. A picture of the kind of life that money reform can create.

Prof. Glen Martin's well received talk was on the necessity of viewing mankind as a whole, not merely as divided into political structures attempting to take advantage of each other with policies leading inexorably toward warfare. Human rights are universal! A money system in so much conflict with human rights in our own country, extends its injustice around the world. We must eliminate the moves toward warfare now, or the warmongers will be in a position under the false guise of "security" to restrict our rights including those that enable us to reform our system.

Stephen Zarlenga gave a description of the "Chicago Plan" which came out of the Great Depression as a solution to the banking crisis, and was endorsed by the then great economic minds in the nation. He showed how the American Monetary Act incorporates the main elements of the Chicago Plan and adds some more, based on our experience since the 1930's.

Congressman Dennis Kucinich's inspiring conference keynote address can be viewed in its entirety at http://www.monetary.org

The American Monetary Institute issued the following press release after the conference:

PRESS RELEASE -- For Immediate Release, October 6, 2005 by the American Monetary Institute -- a monetary policy think tank - Chicago 2005 Monetary Reform Conference - Congressman Dennis Kucinich, Keynote Speaker

MONEY REFORM PLAN WOULD SAVE TAXPAYERS $ BILLIONS PER YEAR IN KATRINA CLEANUP


"An alteration in the way money is introduced into our economy would save at least $10 billion dollars per year in the cleanup and rebuilding aftermath of Hurricanes Katrina and Rita. If the cleanup loans last the normal 30 years, the savings will be over $250 billion," says Stephen Zarlenga, Director of the American Monetary Institute. The plan, known as The American Monetary Act was discussed at the AMI 2005 Monetary Reform Conference, held in Chicago over the weekend at the Essex Inn.


The proposed three part reform of our currency system would have the U.S. Government directly spend the money into circulation rather than the present method of allowing the banking system to create the money and then the government borrowing the money. Funding such infrastructure expenses through bonds generally doubles to triples their final cost.


The reform avoids this expense by removing the fractional reserve provision of the present system, which in effect allows the banking system to create the much needed new money that must be continually introduced into the economy, as population and economic activity expands; or when emergencies such as Katrina, or warfare require great expenditures. Under the reform only the U.S. government, not the private banking system would be allowed to create money.


"What we're proposing is very similar to the 'Chicago Plan' which came out of University of Chicago economists in the 1930's and was widely supported nationwide by the economics profession back then," said Zarlenga.


Under the plan the government spends the new money into circulation on necessary infrastructure, including education. A presentation at the conference by the American Society of Civil Engineers pointed out the deteriorating condition of American infrastructure, which currently receives an overall grade of D, and is predicted to reach D- soon.



MOST OF KATRINA'S DAMAGE ON NEW ORLEANS COULD HAVE BEEN AVOIDED


"This method of introducing new money through infrastructure creation and repair would actually have stopped most of the damage and loss of life in New Orleans because the money would have been available to repair the levees, and they would have probably held", said Zarlenga. "The difference is that under the present private control, money goes largely into speculative bubbles, including wall street games and real estate", he said. "Under societal control it would go much more toward promoting the general welfare. Inflation is avoided because real material wealth has been created in the process, and catastrophic loss including loss of life is prevented."


The keynote speaker at the conference was Congressman Dennis Kucinich, on the topic of Economic Justice. The American Monetary Institute is a 501.c3 publicly supported charitable trust organized in 1996 to promote the independent study of monetary history, theory and reform. This was the institute's first public conference and annual conferences are planned. The institutes website is at www.monetary.org. where a complete video of Congressman Kucinich's speech can be viewed.



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