CITIZEN CURRENCY - a New Monetary System to ReplaceSun Dec 27, 2009 08:3922.214.171.124CITIZEN CURRENCY
a New Monetary System to Replace the Obsolete Federal Reserve System
by James Jaeger
As some of you may know, I have been studying banking and the science of money since about 1974 as a hobby. As of the past several weeks, I have engineered a new system that, to the best of my knowledge, doesn't exist in the present literature and may work.
I would like to first present this early draft to you folks at the MIND-X for your target-practice. I am sorry for the excessive length of this, but things kept coming up that I felt needed to be addressed, if even to convince myself that this System could possibly work.
My wife, Carol, helped me work this out substantially and from a woman's point of view as to fairness. See page 37 about women in the financial sphere in INTEREST AND INFLATION by Margrit Kennedy to see why it's important women feel comfortable about a new monetary system.
I am in hopes that, at the very least, this presentation will stimulate further thought on the subject. If this new monetary system ("Monetary System", "New Monetary System" or "System") receives validation from you as a potentially workable system, my hope would be that it would be piloted in the real world and/or modeled in a computer simulation so its ultimate effects could be estimated.
I am going to assume you are reasonably familiar with the history of money and banking as well as the current Federal Reserve central banking system now in use today. If you are not, I refer you to the considerable discussion and debates posted on the MIND-X since about 1998.(1)
The Problems of Money:
Basically there are three problems that need to be solved in order to create a New Monetary System that benefits the greatest number of people in the United States and/or World. They are as follows:
1. a more accurate definition of money and what it's supposed to do;
2. a determination of who has authority to create money;
3. a method by which money's creators can issue it into the economy without creating unjust enrichment.
A More Accurate Definition of Money:
I propose a more accurate definition of money:
Money is a tally of human effort (as embodied in products and services)
that can ALSO be used as a medium of exchange or a store of value.
Note the emphasis has been changed from a "medium of exchange" to "the tally of human effort." This emphasis is extremely important to keep in mind as you review the balance of this paper.
Review of the Issue-Authority of Money:
In the past, money has been dug out of the ground as gold or silver and coined by governments or banks or issued as paper printed by banks or governments, such paper redeemable in gold or silver or backed by debt or by the "full faith and credit" of the issuing government or by something else.
Today, the U.S. currency is issued by a quasi-private, government-sanctioned banking cartel, known as the Federal Reserve System. Money issued by this system is supposed to reflect products and services in the economy and serve as a medium of exchange. Money issued by the Fed is no longer redeemable in gold or silver, thus is no longer said to be "backed" by gold or silver. Instead, money issued by the Fed is "backed" by debt because of the "full faith and credit" of the U.S. Government. Every dollar issued by the Fed is created from a unit of debt known as a bond, such bond representing PRINCIPLE upon which INTEREST is forcibly payable by We the People.
In this "fiat currency" system, every time a dollar is created, a dollar of debt is created with interest owing to bankers. The only way the interest can be paid is for the Federal Reserve to create more dollars for the interest. But when more dollars are created to pay interest, yet more principle is created which requires yet more interest payments. Thus it is impossible for there to ever be enough money in the economy and to remedy the vicious cycle established. This system of debt-backed money is therefore fatally flawed from a mathematical point of view and has been called the "impossible contract" problem.
Irrespective of the number of products and services in the economy, the money supply must grow exponentially until it eventually ends in hyper-inflation or the government takes some unusual action. We are headed down this path at this writing. More specific mechanics of the current system's liabilities as far as the creation and issue of money are not the scope of this paper but can be reviewed in the free, on-line movie entitled MONEY AS DEBT.
The salient fact is: issue-authority for money is essentially now in the hands of a government that is in partnership with an elite cartel of bankers who have used "legal tender laws" to require that such money be accepted by the Citizens. This "fiat" money is forced upon the Citizens as the only acceptable tender for the payment of taxes, debts, public and private -- and it states a such on every Federal Reserve Note in existence.
Thus the issue-authority of money today is in the hands of ELITE BANKERS and GOVERNMENT OFFICIALS or the two in combination, cooperation and/or collusion, all in direct violation of Article I, Sections 8 & 10 of the U.S. Constitution.
The New Money System I propose here is also probably in violation of the U.S. Constitution. I admit this, not because there is necessarily anything wrong with the Founder's System, but as a suggested Amendment to the Constitution -- hopefully executed in the broad daylight of the American Citizens -- if there is any merit to this new System I propose.
My proposal is relatively simple: I propose to remove the issue-authority monopoly from GOVERNMENT OFFICIALS and ELITE BANKERS and grant it primarily to U.S. CITIZENS. The reasons this should be done; how it can be done; and the benefits, which I believe will accrue to all Americans, as well as the people in the rest of the World, follow:
Who Should Have Issue-Authority of Money:
In this proposed new Monetary System, INDIVIDUAL CITIZENS have the PRIMARY issue-authority for money, however corporations and government, as more extensively discussed below, also have a derivative issue-authority. In this new System any Citizen can write a check for any amount and pay for any PRODUCT, at any time or at any place in the United States (or such country or space participating in this System). Again, although living, breathing people ("Natural Persons") are the preferred, distributed network for the issue of money, there may be no way to ever deny governments and corporations this power, at this or any other time. Ironically, the U.S. Constitution, which is supposed to be the blueprint for a self-governing entity of "We the People," would have to be amended to permit We the People ("Citizen" or "Citizens") issue-authority of money, because, as written, only the U.S. Congress now has issue-authority. Per the 1913 Glass-Owen Act, the Congress DID however delegate this power to the Federal Reserve System, an act many constitutional scholars feel is either unwise, illegal or both.
This paper will focus on the Citizen as the primary issuer and explore the benefits and liabilities of such a System.
In the New Monetary System proposed, the Citizen issues money by simply writing a check and signing that check. Such check is similar to the everyday checks Citizens already write in the current Federal Reserve System, but here is the difference: the CITIZEN CHECK (hereinafter "CITck") is NOT deposited in any bank. The reason a CITck is not deposited is because the Citizen-created instrument is more than a mere instruction for banks to transfer funds: it's an ATTESTATION that a PRODUCT has come into existence; that that product has been witnessed by the Citizen; that that product has been evaluated as being needed and wanted; and that that product has, in fact, been purchased by said Citizen.
By issuing a CITck, a Citizen assumes OWNERSHIP of a NEW product entering the economy. A CITck is NEVER issued for USED MERCHANDISE or PRODUCTS, only new. The act of purchasing a new product with a CITck confers all of the rights and privileges of ownership found in a free-market, capitalist society.
Consideration is transferred to the Seller and to Society (as will be later seen) by the Citizen-Buyer who, by entering into this contract, has assumed the labor of evaluation and the risk of guaranteeing such evaluation.
Consideration is transferred to the Buyer and to Society (as will be later seen) by the Citizen-Seller who, by entering into this contract, has assumed the labor of production and the risk of guaranteeing such production is viable and of quality.
The labor of evaluation and warranty thereof, consists of the following assurances:
1. that the CITck was issued in an amount NEGOTIATED at arm's length in accordance with fair market competition and valuation;
2. that no collusion or fraud is present between the Seller and Buyer because their transaction is of a FIDUCIARY nature;
3. that the products purchased are accurately TALLIED on the back of the CITck by the Seller and acknowledged by the Buyer's endorsement that such tally is true and accurate.
The labor of evaluation and warranty is therefore the consideration provided by the Buyer to the Seller in exchange for the products delivered by the Seller.
In such a transaction two Citizens have duly created REAL money, money backed by REAL products and based upon a REAL contractual agreement and a meeting of the minds.
No government or banks are necessary for this transaction.
Philosophically, the CITck places a PERIOD on the end of the sentence of the production cycle, a production cycle that started with human SERVICES (idea, plan, project, program, manufacture, distribution) and has resulted in a TANGIBLE tally evidencing a valuable final PRODUCT that is also TANGIBLE and ready for final consumption by the Citizens of the United States and World.
Accordingly, the CITck is always made out, "Pay to the Order of: We the People". CITcks are never made out to the Seller, as was formerly done with Federal Reserve System checks.
Creating Money Out of Thin Air:
The New Monetary System thus deviates from the current Federal Reserve System, and possibly all other monetary systems of the past, because of the following:
The checks written by Citizens, CITcks, are NOT deposited in any bank or government institution. CITcks are instead use by other Citizens as a MEDIUM OF EXCHANGE. They are used as newly issued currency based upon newly created products by any and all Citizens. After a CITck comes into existence, the currency thus created may be used VOLITIONALLY as legal tender in the payment of any other products OR services desired.
Under this System, the CITIZEN -- the originator of VALUE in the form of new PRODUCTS -- thus becomes the primary issue-authority for new money.
Once a CITck for a set of PRODUCTS has been written, tallied and issued for those PRODUCTS, it becomes part of the permanent money supply. Then, UPON ENDORSEMENT BY THE BUYER AND SELLER, IT BECOMES A CITIZEN DOLLAR (hereinafter "CIT$"). Endorsement means, the Buyer must sign the front of the check and the Seller must sign the back of the check.
Money has thus been created out of thin air, not by an elite of bankers charging interest; not by a government hell-bent on endless expansion as "justified" by endless WELFARE and WARFARE programs -- but by the everyday CITIZENS who create the actual VALUE of civilization in the first place.
CIT$ are thus BACKED directly by human effort because they were redeemed for actual PRODUCTS at the moment of their creation. The Buyer redeemed his CITck for the Seller the moment he asked for, and received, the PRODUCTS sold and tallied on the back of said CITck by the Seller and verified by the Buyer.
CITcks and CIT$ are thus backed directly and accurately by HUMAN EFFORT and such backing is guaranteed by the millions of individual Citizens DISTRIBUTED throughout the economic network of the country and civilization on a FREE-MARKET basis.
Thus: ANY CITIZEN CAN WRITE A CITck FOR ANY AMOUNT, AT ANY TIME, AT ANY PLACE AND ISSUE SUCH CITck TO PURCHASE ANY PRODUCT NO MATTER HOW "EXPENSIVE" SUCH PRODUCT IS OR WHO IS SELLING SUCH PRODUCT, WHETHER A PERSON, A GOVERNMENT OR A CORPORATION.
ONCE A CITIZEN CHECK (CITck) HAS BEEN EXCHANGED FOR A PRODUCT, IT BECOMES PART OF THE PERMANENT MONEY SUPPLY AND IS THEREAFTER KNOWN AS A CITIZEN DOLLAR (CIT$).
Money has properly, and ethically, been created out of thin air as tally of human effort (as embodied in products and services) that can ALSO be used as a medium of exchange or a store of value.
Again, the CITck is always made out, "Pay to the Order of: We the People". CITcks are never made out to the Seller, as was formerly done with Federal Reserve System checks.
Gross Domestic Tally:
Unlike the Gross Domestic Product (GDP) -- or the Gross National Product (GNP) before it -- the Gross Domestic Tally (GDT) actually means and records something of importance to Society.
The new money issued -- in the form of CITcks -- certifies the entrance, amount and qualification of new products entering the economy. This is a much more accurate tally of all products created than the laughable, so-called Gross Domestic Product which not only tallies products, but SERVICES and even products that have been destroyed and are thus non-existent.
The GDT is also much more accurate than GDP tallies done by an out-of-touch government in a distant place. The actual CIT$ created are also a much more accurate reflection of products in circulation than the estimates generated by the Federal Reserve Open Market Committee that can only rely on inaccurate GDP figures generated by the out-of-touch government in a distant place.
Also, GDT figures aren't motivated by a banking elite in secret session that stands to profit by collecting interest off of each newly-created Federal Reserve Note monetized from debt, or created as account money through Fractional Reserve Banking or by inflating the GDP figures to "justify" inflating the money supply by the two methods just mentioned.
A money supply created directly by CITIZENS -- rather than GOVERNMENT OFFICIALS or BANK ELITES -- will be done on a DISTRIBUTED, local level rather than a CENTRALIZED, distant level. Again, the money supply will more accurately represent, and attest to, the actual PRODUCT supply. The money supply will be created by a DISTRIBUTED network of intelligence rather than a CENTRAL bank of vested interests that can only estimate the tally of products in the economy at any given time.
Thus, no more Boom and Bust cycles in a CITIZEN-ISSUE economy.
The universal TALLY of PRODUCTS and MONEY in circulation, as represented by each CIT$ in circulation, will be, and CAN be maintained, at an exact 1:1 ratio.
Thus, rising prices due to monetary inflation will be mathematically impossible.
Recession and depression, due to monetary "elasticity," will also be mathematically impossible.
Prices will ONLY be affected by the law of supply and demand of tangible resources and human services -- NOT BY CAPITAL SCARCITY: an artificial construct of the state and banking monopoly.
Difference between Products and Services:
Again, CITcks created by Citizens and issued ONLY for PRODUCTS, then become CIT$ which can THEN be issued for SERVICES or PRODUCTS.
CITcks cannot be issued directly for SERVICES.
CITcks can only be issued to purchase tangible PRODUCTS as a tally and evidence of such product's existence and the tangible evidence that such product entered into the economy as authorized AND warranted by the Citizen in a fiduciary relationship engaged in a contractual transaction (as above described).
SERVICES, in this System, are deemed INTANGIBLE, and this is why they cannot be represented by newly created TANGIBLE money (and why it's laughable that services are included in the so-called Gross National PRODUCT put out by an insane government.
If CITcks were allowed for the purchase of SERVICES, it would open the door to fraud and collusion, because unethical citizens might inappropriately issue
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