DENVER, Oct. 18 /PRNewswire/ -- The following is the second of a six-part statement by J. Moromisato.
2. The New Financial System and Freed Money
What is Freed Money?
Freed money is the newest money technology (MT3), it consists in centralizing the money creation power in the central bank (our Fed). Banks would continue taking deposits but would be authorized to lend only money borrowed from the Fed.
The current money technology (MT2) is unconstitutional, prone to collapse, and run for the benefit of the super-rich.
Most economists and financial analysts consider the recently enacted "Financial Reform" to be utterly insufficient to prevent a repetition of the recent recession. For once, they are right; it is the lending out of private savings what leads to financial bubbles.
It completely puzzles me that the mainstream media overlooks my proposed solutions, amidst the total absence of any other. It may be up to you to spread my message until the powers-that-be pay attention and do something about the dysfunctional financial system.
The Freed Money regime would give the Fed total control over the flow of credit into the economy.
Every year, such credit flow would balance the amount deposited into the financial system -- normally about $3 trillion -- and the Fed would be able to direct that flow to both the private and public sectors, as mandated by Congress.
The assets held by banks will continue to grow, as the total outstanding debt of the nation grows, but the markets for those assets would be more regulated to preclude speculative activities, which would make the values of those assets much more stable.
Still, some assets may go bad, affected by innovations or market fluctuations, and cause some financial institutions to become insolvent. The Fed would have several ways to preserve the total flow of credit into the economy, including allowing the failing firm to close, or to ignore the insolvency and continue lending to the affected institution.
The new power of government, at all levels, to borrow from the Fed, shall provide it with ample resources for public investment. Our neglected infrastructure would once again become the envy of the world; our education system and our health care institutions would again be examples for the rest of the world to follow.
(Visit http://www.DenverPlan.com for more details)
About J. Moromisato
Born in Lima, Peru, J. Moromisato became an American citizen in 1985. He has a Ph.D. in high energy physics and a Master's in economics. A Denver resident, Moromisato is the author of The Origin of Wealth and Poverty (2007), The Coming Age of Freed Money (2010). And The Denver Plan to End Unemployment (Oct 2010).
SOURCE J. Moromisato