So, what's the difference between the Federal Reserve system and the American System? The Federal Reserve is by nature a central bank. And a central bank is modeled on the Bank of Amsterdam and the Bank of England. And these banks were set up by the stockbrokers of the Dutch East India Company and the British East India Company to serve a free trade, slave labor, highly speculative, commodity controlled, trade-controlled monopoly kind of economic system. This is an oligarchical system consisting of central banks and bankers, known as the British Empire, or now more commonly referred to as the Modern British Empire, or just plain “the oligarchs”.
They have a monopoly on trade, and cheap labor. They control the stock market, they control speculation, and if they need to increase the debt or disrupt a political rival, they can launch the government into war because they've got that kind of political power.
That's what a central banking system is, and that's what the Federal Reserve has entirely become. There have been attempts in the past under Franklin Roosevelt to change that. There was a proposal in the Depression to set up credit banks, specifically named intermediate credit banks at Federal Reserve branches. And these would be specifically focused on ensuring credit was available up to five-year loans to any commercial enterprise which met financial and legal standards.
And then these intermediate credit banks would be directly backing up the local and smaller banks. This attempt was shut down, but that would have been an example of the American System, also known as a national banking type system. And the only time we really got to a point where the Fed started to function like a credit bank (national bank) was when WWII started. Then they provided low-interest rate loans to every war enterprise needed. But we didn't have to invest merely into war. We could have done that in 1935 and rebuilt.
We could have built more power plants, more coal plants. We could have gone hog wild with rebuilding the country's industry and energy supply, but the Federal Reserve and the bankers weren't going to unleash anything until the question of war was at stake. And then of course, massive new government debt was also occurring.
It's for Trump to get a hold of the Federal Reserve, to put real restrictions on it, to pull it directly under the control of the executive branch. Not total control, as it should have direct participation from private banking. That's not a bad system, but it can't be completely divorced from the executive branch, like they try to say it is now. And you've got to make sure that you're lending to real physical production. And that means you can set policy.
THE ROLE OF A NATIONAL BANKING SYSTEM
Our new Secretary of Energy, Donald Trump, and now a broad consensus of economists and other interested parties identify that we need to double or even triple energy supply in this country. So that's practically adding another one and a half terawatts of baseload energy from coal, natural gas and nuclear.
That's a huge construction project. It’s about 1500 new large scale nuclear plants. You can also diversify a little bit, because it would take too long if we did it that way. We'd want to do some coal and some natural gas to get things moving quickly.
The role a national banking system would play is in creating the credit. The credit in the US system actually already exists. We have $7 trillion just sitting there, not being invested. We've got to start to move that money and vector it into these areas. That means these areas become profitable, but that speculative areas become less profitable. And this is ultimately the responsibility of a national banking system. It has concern for the long-term survival of the nation, of its people, of its posterity, and of the nation's physical and national security.
In a nutshell that's the responsibility of the American System or national banking system, and it's the role of the federal government to regulate it. In short, the central banking system of the Fed is beholden to the bankers and the banking system, and the national banking system, i.e. the American system is beholden to the survival and progress of the nation’s people.
There is much more to say about the American system versus the Federal Reserve system, so if you’d like to learn more, please feel free to watch and/or listen to the above interview I conducted with Michael Steger, Chair of Promethean Pac. Michael has tremendous knowledge in this area, and holds an online discussion every Monday at 7pm Eastern Time. You can find details at www.prometheanpac.com.
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