American Monetary Institute
PO BOX 601, VALATIE, NY 12184
Tel. 518-392-5387, email
Stephen Zarlenga, Director

Dedicated to the independent study
of monetary history, theory and reform

The Need for Monetary Reform*

Monetary reform is the critical missing
element needed to move humanity back
from the brink of nuclear disaster,
away from a future dominated by
fraud and warfare, toward a world
of justice and beauty.

The power to create money is an awesome power – at times stronger
than the Executive, Legislative or Judicial powers combined.
It’s like having a “magic checkbook,” where checks can’t bounce.
When controlled privately it can be used to gain riches, but more importantly it determines the direction of our society by deciding
where the money goes – what gets funded and what does not.
Will it be used to build and repair vital infrastructure such as
Levees to protect major cities? Or will it go into warfare or
real estate loans, creating asset price inflation - the real estate

Thus the money issuing power should never be alienated from democratically elected government and placed ambiguously into
private hands as it is in America in the Federal Reserve System


Indeed most people would be surprised to learn that the
bulk of our money supply is not created by our government, but
by private banks when they make loans. Through the Feds fractional reserve process the system creates purchasing media
when banks make loans into checking accounts. So most of our money is issued as interest-bearing debt.

We are borrowing this money system from private banks when
instead we should own the system, not rent it. Our government
has the sovereign power to issue money (Art.1, Sect.8) and spend
it into circulation to promote the general welfare through the
creation and repair of infrastructure, including human
infrastructure - health and education - rather than misusing
the money system for speculation as banking has historically
done. Our lawmakers must now reclaim that power!

Money has value because of skilled people and resources and infrastructure, working together in a supportive social and legal framework. Money is the indispensable lubricant that lets them
“run.” It is not tangible wealth in itself, but a power to obtain
wealth. Money is an abstract social power based in law and
whatever government accepts in payment of taxes will be money. Money’s value is not created by the private corporations that now control it.

Unhappily, mankind’s experience with private money creation has undeniably been a long history of fraud, mismanagement and even villainy.* Banking abuses are pervasive and self-evident. Major companies focus on misusing the money system instead of
production. For example, in June 2005, Citibank and Merrill Lynch paid over $1.2 Billion to Enron pensioners to settle fraud charges.

Private money creation through fractional reserve banking fosters unprecedented concentration of wealth which destroys the process
and ultimately promotes imperialism. Less than 1% of the
population claims ownership of almost 50% of the wealth, but vital infrastructure is ignored. The American Society of Civil Engineers
gives a D grade to our infrastructure and estimates that $1.6 trillion is needed to bring it to acceptable levels.

That fact alone shows the world’s dominant money system to be
a major failure crying for reform.

Infrastructure repair would provide quality employment
throughout the nation. There is a pretense that government
must either borrow or tax to get the money for such projects.
But it is a well enough known, that the government can directly
create the money needed and spend it into circulation for such
projects, without inflationary results.

Monetary reform is achieved in 3 parts which must be enacted
together for it to work. Any one or any two of them alone won’t
do it, but could actually further harm the monetary situation.

First, incorporate the Federal Reserve System into the U.S.
Treasury where all new money is created by government as
money, not interest-bearing debt, and spent into circulation
to promote the general welfare; monitored to be neither
inflationary nor deflationary.

Second, halt the banks privilege to create money by ending the fractional reserve system in a gentle and elegant way. All the past monetized private credit is converted into U.S. government money. Banks then act as intermediaries accepting savings deposits and
loaning them out to borrowers; what people think they do now.

Third, spend new money into circulation on infrastructure,
including education and healthcare needed for a growing society, starting with the $1.6 trillion that the American Society of Civil Engineers estimate is needed for infrastructure repair; creating
good jobs across our nation, re-invigorating local economies and
re-funding government at all levels.

The false specter of inflation is usually raised against such
suggestions that our government fulfill its responsibility to
furnish the nation’s money supply. But that is a knee jerk
reaction - the result of decades, even centuries of propaganda
against government. When one actually examines the monetary
record, it becomes clear that government has a superior record
issuing and controlling money than the private issuers have.*
Inflation is avoided because real material wealth has been created
in the process.

This press release from the recent monetary reform conference in Chicago, which I addressed highlights the beneficial effects of the
plan both in terms of saving on interest, and in avoiding such
disasters in the first place:
End of press release.

- - - - - - - - - -

Money Reform Plan Would Save Taxpayers $ Billions Per Year in Katrina Cleanup

"An alteration in the way money is introduced into our economy
would save at least $10 billion dollars per year in the cleanup and rebuilding aftermath of Hurricanes Katrina and Rita. If the clean-
up loans last the normal 30 years, the savings will be over $250
billion," says Stephen Zarlenga, Director of the Institute. The plan, known as The American Monetary Act was discussed at the
American Monetary Institute 2005 Monetary Reform Conference….

The proposed three part reform of our currency system would
have the U.S. Government directly spend the money into circulation rather than the present method of allowing the
banking system to create the money and then the government borrowing the money. Funding such infrastructure expenses through bonds generally doubles to triples their final cost.

The reform avoids this expense by removing the fractional reserve provision of the present system, which in effect allows the banking system to create the much needed new money that must be
continually introduced into the economy, as population and
economic activity expands; or when emergencies such as Katrina,
or warfare require great expenditures. Under the reform only the
U.S. government, not the private banking system would be allowed
to create money.

"What we're proposing is very similar to the 'Chicago Plan' which
came out of University of Chicago economists in the 1930's and
was widely supported nationwide by the economics profession back then," said Zarlenga.

Under the plan the government spends the new money into
circulation on necessary infrastructure, including education. A presentation at the conference by the American Society of Civil Engineers pointed out the deteriorating condition of American infrastructure, which currently receives an overall grade of D,
and is predicted to reach F


Most of Katrina's Damage on New Orleans Was Avoidable

"This method of introducing new money through infrastructure creation and repair would actually have stopped most of the
damage and loss of life in New Orleans because the money would
have been available to repair the levees, and they would have
probably held" said Zarlenga.

"Under the present private control, money goes largely into
speculative bubbles, including Wall Street games and real estate"
he said, "Under societal control it would go much more to
promoting the general welfare. Inflation is avoided because real material wealth has been created in the process, and catastrophic
loss including loss of life is prevented.

- - - - - - - - - - - - - - - -

As the late Congressman Wright Patman, Chairman of the House Committee on Banking and Currency for over 16 years, said, "I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money....I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with the Congress for sitting idly by and permitting such an idiotic system to continue.”


*For an academic history and reform see The Lost Science of Money by Stephen Zarlenga.


"Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money."

Sir Josiah Stamp , Director of the Bank of England (appointed 1928). Reputed to be the 2nd wealthiest man in England at that time.


For Intriguing Drams See:
Monopoly Men (Federal Reserve Fraud) (1999)


For A BIGGER Picture:
For the Most Transformative Web Site I Have Found See:

For in-depth research see the following: The Money Masters

Holistic Health and Money


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