Lending privately created bank money leads to the growth of an asset bubble, which upon bursting causes a recession accompanied by high unemployment
DENVER, Oct. 14, 2010 — The Following is the first of a six-part statement by J. Moromisato.
1. Freed Money and Full Employment.
The Labor Department's last unemployment report before the midterm elections showed a dismal picture of unremitting unemployment through the end of the year and beyond.
That the mainstream media is overlooking my proposed solutions, amidst the total lack of any other solution to this grievous problem, is a complete puzzle to me. It may be up to you to spread my message until the powers-that-be pay attention and do something about unemployment.
What is Freed Money?
The coin, made of silver or gold — invented around 600 B.C.E. — is the oldest money technology (MT1); it revolutionized the marketplace and marked the beginning of the economic system.
The second money technology (MT2) is partial reserve banking, invented in Great Britain by the end of the 17th century: it consists in the creation of money out of bank deposits. MT2 is the most transcendental of all inventions so far: it sparked the Industrial Revolution, which transformed our lives and carried our civilization to an unprecedented level of prosperity. Nevertheless, MT2 is a faulty technology, which is at the root of the great problems facing our nation and the world today.
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.
Freed money would solve most of the problems left behind by MT2, such as unemployment, poverty, gross inequality, and the tyranny of the super-rich.
How MT2 Causes Unemployment
MT2 is responsible for the flow of credit that sustains our economic activity, and whenever that flow falters, as occurred in 2008, the economy slows down and unemployment rises rapidly. There are three fundamental problems with MT2:
- It is unconstitutional. The creation of money is a power reserved to the government
- It is structurally unsound. Lending privately created money leads to the growth of an asset bubble, which upon bursting causes a recession (preceded by a burst of unemployment)
- It is run by the super-rich to benefit the super-rich.
Freed Money would be constitutional, would eliminate the business cycles, and would benefit the entire nation.
(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).
Contact: J. Moromisato, (303) 321-0577
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