You Can't Solve the Problem if You Don't Know Its Source

When Spencer asked me to join this group I agreed, stating I wouldn’t have much time to contribute. Well, here goes.

I’d like to post the content of a blog of mine on Gaia, The Private Bank: Financial Friend or Foe?. I really see that we’ve got to begin to think outside the box to sort out our current financial mess. Local banks and currencies are entirely possible. Australia has had successfulocally owned banks for years.

‘I believe that banking institutions are more dangerous to our liberties than standing armies.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.’

Thomas Jefferson 1802

Deirdre <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Kent is a founding member of Living Economies, a lifelong social and environmental activist, former city councilor and grandmother. She lives with her husband on an organic fruit and nut small holding in Otaki managed by permaculture principles. She’s been my most recent guest on Voices from the North.

Deirdre Kent is the author of Healthy Money, Healthy Planet: Developing Sustainability through New Money Systems that was published in 2005.

She claims our current financial crisis is not about toxic financial products or bad debts. We need to ask the more fundamental questions about how money is created in the first place. Why does every economist and politician claim we have to have economic growth? Deirdre has been crying out in the wilderness for a long time and the current domino effect of money problems around the world has been an unavoidable scenario in an unsustainable system based on constant growth of money and goods.

Deirdre mentions a book she’s reading called The Creature from Jekyll Island. Put simply, this may be the most important book on world affairs you will ever read. It describes the formation of the Federal Reserve System at a conspiratorial meeting that took place on Jekyll Island off the coast of Georgia in 1910. This highly secretive meeting marked the beginning of the complete takeover of the US government by powerful private bankers.

Deirdre explains why our current ailing system is dependent on continual growth, which is, of course, not sustainable on a finite planet with finite resources. The current fractional reserve of banks is 70 to 1. That means there is only $1 backing every $70 in circulation. Does that sound prudent and safe to you? America stopped publicizing their money supply (the M3) a few years ago. Private banks determine the money supply, Deirdre states that politicians are very small players.

Under the current intentionally flawed system, money flows from the poor to the rich in every instance. The interest we truly pay is built into the purchase price of everything we buy because a manufacturer borrows money to make the goods in the first place.

There are solutions. Deirdre suggests creating social bonds in your own local community and developing strong and vibrant community trading schemes, local currencies and barter systems. Green dollar systems originated in 1987 and some, as in Golden Bay on New Zealand’s South Island and the Wairarapa on the North Island, are still going strong.  New examples are springing up all the time like the local currency on Salt Spring Island in British Columbia. The success of these systems is based on trust and relationships. Deirdre suggests strongly that we need an organic model for international finance with an ethical base. She speaks about an example of a Time Bank system in Lyttleton and the positive possibilities of this sort of system in helping the sick and the elderly through more equitable ratios of job/work value.

The interview closes with a discussion about the enormous value of social networking. John mentions www.gaia.com at this time. Anyone anywhere can create a social network for free today using software like that available from www.ning.com.

Visit Living economies at www.le.org.nz to order Deirdre Kent’s book, Healthy Money, Healthy Planet.

Click here for the interview.

You can’t solve a problem if you don’t know its source.

All the best.

John

Re: You Can't Solve the Problem if You Don't Know Its Source

…I think Diedre is pointing at the crux of the problem…
 
 
 
…the 13 families that hold controling interest in the financial structure that was put in place in 1913…
 
 
 
…they have held a monopoly on all GGP (Gross Global Product)… like a criminal consortium they get their cut from ALL transactions…
 
 
 
…if you know the source…how then do you solve the problem?…
 
…when the problem controls All the militaries, food supplies, water, and flow of information ?…
 
 
 
…has anyone here heard of NESARA ?…

Re: You Can't Solve the Problem if You Don't Know Its Source

Hi Will,
It is a challenge to see solutions when you realize a few players control the board. But can they control what we do in our little communities? We can support each other and create vibrant, somewhat self-sustaining communities.
It takes effort and truly acting locally while thinking globally. The powers that be want us to feel powerless, but we’re not.
 
Thank you so much for your comments. John

Re: You Can't Solve the Problem if You Don't Know Its Source

I agree the financial, banking, and economic systems are broke. I also agree that we will need to re-define what constitutes growth and create new more sustainable economic environments that create system tangible and real based on triple bottom line profitability (economic, people, environment).

Having worked for 12 years in corporate banking and serving in various capacities from commercial credit analysis, commercial loan operations, Information Technology, Training, and mergers and acquisitions how we got in this mess is that banks violated their principals by loosening their requirements for the ability to repay loans. That’s no secret. You could see that train wreck coming. I just didn’t personally think it would be this big.

Banking is a tough business. The downside risk is huge and the upside is what you can earn on loans, fees, credit cards, trust services and investments. Most of this is volatile and risky or low growth. That is about it. So banks took unnecessary risks to try to keep growth going to the positive in a straight line upward because if Wall St. sees any potential for not hitting earnings targets then the stock price gets penalized. Of course this was unsustainable and unrealistic. Working inside the industry, I could see in the late 80s that moving lending towards a quota driven and sales\marketing oriented system was going to spell future problems. Here they are.

I don’t see radical change in monetary policy, bank, or the economic box we have painted ourselves in until the pain is too deep. I have interacted with banking CEOs and Executive leadership, and they believe they are smart because they are in those positions. They don’t change until they get slugged in the wallet, and then it is too late. I have seen it, lived it, and advised one CEO against doing the same old thing. He didn’t listen, didn’t do due diligence in purchasing another bank, had a horrible merger plan, and ended up selling out less than a year later. The war stories I could tell. Enough of that.

Since current leadership economically is looking backwards and inside the box, here’s my suggestion. Create National Investment Funds guaranteed by the government like a SBA (Small Business Administration Loan) anywhere from 90% to 100%.

Create separate National Investment Funds for Alternative Energy, Infrastructure, Education, Healthcare, Technology, etc… Hire experts to run the funds to assess potential business opportunities like a venture capital firm only with much less risk because it is government backed. This attracts private investment. Some government stimulus could be put into in these funds, and private investment would be encouraged because it is government insured or guaranteed.

Sure, some investments within these funds might tank, but others would thrive. Venture Capitalist undestand this and know how to make money in this enviroment mitigating risk. If a fund made no money or lost some, the downside risk is much smaller than anything else out there, and the upside potential is unlimited.

It gets money going towards investment, makes people feel safe with the guarantees, and we don’t have to revamp the whole system which is a huge job that will take some time. Banks, brokerage firms could all attract investment from their customers into these funds. They could capture a small management fee for admin., attract investment, and also be subject to certain regulatory requirements and audits that make them account for every dime invested and earned as well as any guarantee money they try to claim.

Some of the out of work bankers and investment company employees could serve as auditors, because they would know where to look for improprieties unlike many of the current regulators even in the FDIC, OCC and OTC.

It attacts private and government funding. Helps keep the system up and running to buy the time for it to be revamped. It buys everyone time to create new economic models, gets investment money flowing into the system, and provides for minimal or no downside risk unless of course everything tanks which is the direction we are heading on the current path.

This can work! And it pulls everyone into it from the government to private investors, to all our creative and innovative entrepreneurs. Let’s get back into the tangible, valuable, and sustainable investment game, and have everyone pitching in and rowing in the same direction.

This can work!

Re: You Can't Solve the Problem if You Don't Know Its Source

Zennie, your words come from an informed space. And you provide real possibilities. Thank you so much,
John

Re: You Can't Solve the Problem if You Don't Know Its Source

…I admire your optimism Zennie…
 
…a case of the baby with the bathwater…
 
…much of America is wondering if there is a baby in there…
 
…me… I’m thinking that the money changers are about to get evicted from the temple…
 
 
 
…it’s time for the “smartest men in the room” to spend some time under the bridge with a sleeping bag and a coffee pot…