DOLLAR DECEPTION: HOW BANKS SECRETLY CREATE MONEY, Ellen Brown, July 3rd, 2007

http://www.webofdebt.com/articles/dollar-deception.php

“Price inflation is only one problem with this system of private money creation. Another is that banks create only the principal but not the interest necessary to pay back their loans. Since virtually the entire money supply is created by banks themselves, new money must continually be borrowed into existence just to pay the interest owed to the bankers. A dollar lent at 5 percent interest becomes 2 dollars in 14 years. That means the money supply has to double every 14 years just to cover the interest owed on the money existing at the beginning of this 14 year cycle.”

Isn’t this a real solution, NZ could REPEAT again:

WAKING UP ON A MINNESOTA BRIDGE: HOW TO SOLVE THE INFRASTRUCTURE CRISIS WITHOUT SELLING OFF OUR NATIONAL ASSETS, Ellen Brown, August 4th, 2007

http://www.webofdebt.com/articles/infrastructure-crisis.php

“Located among the British Channel Islands just south of Great Britain, Guernsey is so small that it has been able to stay under the radar long enough to try some experimental financing without raising the hackles of the international banking establishment that is normally in control of such things. When the Guernsey government needs funding, it simply issues the money it needs. In 1994, Dr. Bob Blain, Professor of Sociology at Southern Illinois University, wrote of this remarkable island:

In 1816 its sea walls were crumbling, its roads were muddy and only 4 1/2 feet wide. Guernsey’s debt was 19,000 pounds. The island’s annual income was 3,000 pounds of which 2,400 had to be used to pay interest on its debt. Not surprisingly, people were leaving Guernsey and there was little employment.

Then the government created and loaned new, interest-free state notes worth 6,000 pounds. Some 4,000 pounds were used to start the repairs of the sea walls. In 1820, another 4,500 pounds was issued, again interest-free. In 1821, another 10,000; 1824, 5,000; 1826, 20,000. By 1837, 50,000 pounds had been issued interest free for the primary use of projects like sea walls, roads, the marketplace, churches, and colleges. This sum more than doubled the island’s money supply during this thirteen year period, but there was no inflation. In the year 1914, as the British restricted the expansion of their money supply due to World War I, the people of Guernsey commenced to issue another 142,000 pounds over the next four years and never looked back. By 1958, over 542,000 pounds had been issued, all without inflation.

Guernsey has an income tax, but the tax is relatively low (a “flat” 20 percent), and it is simple and loophole-free. It has no inheritance tax, no capital gains tax, and no federal debt. Commercial banks service private lenders, but the government itself never goes into debt. When it wants to create some public work or service, it just issues the money it needs to pay for the work. The Guernsey government has been issuing its own money for nearly two centuries. During that time, the money supply has mushroomed to about 25 times its original size; yet the economy has not been troubled by price inflation, and it has remained prosperous and stable.”

What’s good for the Guernsey, could be good for the Kiwi, AGAIN:

http://publiccreditorbust.blog.com/2009/09/11/michael-joseph-savage-explains-how-public-credit-was-used-to-build-state-houses/

Why not?

Jacko – useful comment here, it got me delving back into ‘Web of Dept’, the NZMEA submission with the North Dakota State Bank solution, and then Iain Parker’s blog:

http://www.interest.co.nz/ratesblog/index.php/2009/11/13/opinion-tax-kiwi-trading-to-reduce-speculation-and-lower-the-currency/#comment-47303