[GJM] #33 John and Doug On The Inner Structure Of The US Economy

[wesburt at juno.com]

Hi again Doug and John,

Many thanks for your current venture into 
much needed monetary reform.  It is a 
tough nut to crack, as we all know from 
sad experience with money lenders.  If 
we could extend the scope of the topic 
to include those folks, like my self, who 
are "Vocabulary Handicapped," the total 
audience reached might be three times the 
audience that can handle the topic with 
words only.  Much good can come of a 
larger audience for this subject.

I was delighted with your exchange of 
e-mails on "Creation and Destruction of 
Money (etc)."  I have saved all related 
comments and have not yet heard anything 
that does not fit nicely on attached figures 
4 & 8, provided one accepts the fact that 
a significant part of money M1 circulates 
continuously between checking accounts 
of businesses and households (M1c-A), 
while a second part of money M1 circulates 
continuously between checking accounts of 
businesses only (M1c-B). Banks render their 
most valuable, perhaps their only, service 
when they facilitate this circulation.

The balance of money M1 will appear as 
positive balances in both business and 
household checking accounts, or can be 
used (invested) in speculative transactions. 

Every household or business checking 
account of the "Real Economy" on Fig. 4 can: 
access any of the four ports that interface 
with the banking system to increase/decrease 
loans or to increase/decrease deposits; 
and likewise access the four ports of the 
interface with the rest of the global economy.

The second attached file, 2-3e, provides a 
monetary history of the US economy from 
colonial times to date, and marks a major 
transformation in 1895, from a continuously 
increasing value of the dollar to a continuously 
decreasing value of the dollar, beginning at 
2.3%/year (1895 to 1770), continuing at 
3.3 %/year (1980 to 2002), and finally at 
4.0%/year (2002 to date).  Who knows what 
the next level of NIR will be?

The US dollar has been counterfeited, well in 
excess of the M1 growth needed for stable 
prices, since the 1970s. When someone blew 
the whistle in 1994, the response was prompt 
and concise. M1 stayed nearly constant for 
eight years, or about long enough to move 
the excess reserves into M1c-A and Mic-B 
to sustain the 3.3%/year natural inflation rate 
(NIR) determined by the century old systemic 
defect in US public policy.  Since the public was 
oblivious of how the economy is structured only 
the counterfeiters heard the whistle blower and 
they reverted to form when reserves ran out 
and the NIR increased to 4.0%.year and up.

Of course, at any time during the 20th century 
the NIR could have been restored to its original 
rate of 1.2%/year deflation, which Americans 
enjoyed for a century prior to 1895; by raising 
our 50% rate of investment in developing our 
human assets to the 100% rate of investment 
our corporations always make when developing 
their capital assets. Listen for some knee jerk 
conservative to yell: "that is Socialism!"  You 
bet it is!. Socialism and 100% Capitalism for 
our corporations and 50% Capitalism to drive 
American households into debt and poverty 
to preserve and expand the demand for 
borrowed money.

There is a world wide belief, perhaps a new 
religion, that "one world government" already 
has been established while World Citizens on 
list >worldcit at googlegroups.com< were busy 
debating whether, or not; Eastern, Mid-East, 
and Western Holy Books each laid down the 
same Law for the governance of human affairs.
In Europe, the ME, Russia, India, and China 
this "one World Government" is called PAX 
AMERICANA.  Among English speakers the 
topic is taboo, and only the politically incorrect 
dare to speak of it. Our experience to date 
shows that a wealthy and powerful minority do 
not want the same law, especially the whole law. 
laid down in each religion, nation, state, or local 
community.  Hence the determined effort over 
the last thirty centuries to obfuscate the whole 
law by addling the public mind.

It may be a good thing that PAX AMERICANA 
has been established. Now a determined effort by 
a few dedicated people could create global peace 
and sustainable prosperity by correcting only the 
systemic defect in US public policy.  Surly, George 
Bush wants that as much as any of us want it.

Kind regards,

Wes Burt

               TOP and TWP are cognoscible on
                Dr. W. Curtiss Priest's web site at:
       <http://www.epie.org/cyber-soc/default.htm>
                 TOP is GOOD --- TWP is EVIL


 
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