Fix Our Money

Exhibit 3 below is the portion of the ASRP that will help to “Fix Our Money.” It is supported by the following proposed legislation to deal with the two primary sources of inflation in America: The Debt/Credit-Based Monetary System and the lack of competition in the Oil Industry and other monopolies.

A. How Can We Address the Debt/Credit-Based Monetary System in America?

1. Brief History of the Debt/CrBased Monetedit-ary System in America. The Federal Reserve Act of 1913 passed by the federal government gives private banks and other lenders in our modern American society monopolistic power to control the supply of money to the national economy from the private sector, and they do not have to own the money that they lend.

Banks are given the power to create money “out of thin air” and lend it to businesses and the American people at exorbitant interest rates, and they can control the supply of money to the national economy and the Stock Market with very little governmental oversight. Before discussing ways to fix our monetary system and control our public debt, the origins of our current monetary system will be reviewed again.

According to the website, (Famguardian-Scope of GAO Audits. n.d.), the following areas of the Federal Reserve System (FED) are excluded from inspections and audits by the General Accounting Office (GAO):

Transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
Deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;
Transactions made under the direction of the Federal Open Market Committee; or
a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to these items.

Since the Federal Reserve System (FED) is a private corporation owned by the banks, these are the very areas that should be inspected and audited by the GAO for the protection of our democracy and the security of the nation and the American people.

M.W. Walbert, in his 1899 book The Coming Battle, discusses the origins of money power in America, which began when the first central bank was chartered for 20 years by Congress on February 25, 1791, called the Bank of the United States.

The early monetary debate was between Thomas Jefferson, who believed that the power of money should rest with Congress and the people, and Alexander Hamilton, who believed that the power of money should rest with the trading, banking, and commercial establishments.

Thomas Jefferson pointed out the dangerous possibilities of the bank to influence the politics and business of the nation. Hamilton won the first monetary debate, and the first central bank was chartered. When Congress refused to re-charter the bank 20 years later in 1811, the bank retaliated by reducing the available currency to the nation, which brought on the great panic of 1811.

During the War of 1812, the banks refused to loan money to the government to support the war and Congress issued treasury notes to finance the war which were gladly received by the people. Immediately after the end of the war, the bank renewed its effort to obtain a new charter from Congress.

Walbert goes on to discuss the fact that Thomas Jefferson and other leaders again warned Congress against renewing the charter with the United States Bank. Jefferson wrote in a letter to John Tyler: “And I sincerely believe with you that banking institutions are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale."

Despite these warnings, Congress renewed the charter with the United States Bank in 1816, and between 1816 and 1828 it was the sole negotiator of the financial affairs of the nation, both public and private. Its power in politics was immense, and it swayed elections at will. When Andrew Jackson refused to bow to political pressure and renew the bank's charter in 1832, the bank called in loans and contracted the currency of the nation bringing distress to the nation’s economy.

The United States Bank president, Nicholas Biddle, put enormous political pressure on President Andrew Jackson to renew the charter, but Jackson refused and eventually removed all the federal deposits from the central bank and deposited them in state banks, which caused the central bank to collapse. President Jackson then paid off the national debt of the United States for the first time in history, but the nation’s economy still suffered from the retaliatory practices of the central bank.

The website, (Wikipedia-History of Banking in the US. n.d.), reveals that from 1837 to 1863 the “Free Banking” era occurred in America such that the states began charting banks and allowing them to issue bank notes against gold and silver coins. The states regulated the activities of the banks, such as reserve requirements, interest rates for loans and deposits, and capital requirements, and all banking business was done by state-chartered institutions from 1840 to 1863.

This “Free Banking” era generated a multiplicity of state bank notes which caused great confusion and loss. Congress passed the National Banking Acts of 1863 and 1864 to correct the problems of the “Free Banking” era. These Acts created the United States National Banking System and established a process for banks to be chartered by the federal government, and it also provided the basis for a national currency backed by U.S. Treasury securities.

The National Bank Act established the Office of the Comptroller of the Currency as part of the U.S. Department of the Treasury to examine and regulate the nationally chartered banks. As an incentive to encourage the state banks to join the National Banking System, Congress began taxing the state bank notes a standard 10%.

The state banks responded to this tax by setting up demand deposit accounts, also known as checking accounts, which became a new source of revenue for them. This resulted in a “dual banking system “in which new banks could choose to be either a state-chartered bank or a nationally chartered bank.

The banking history article goes on to reveal that during the Civil War, the federal government syndicated banking houses to raise money to support the war effort by selling government bonds to a wide range of investors including the public. This gave rise to the investment banking industry. After the war, investment banking emerged to support the expansion of railroads, mining companies, and heavy industry, but investment bankers were not authorized to accept deposits or issue notes.

Their function was to act as brokers or intermediaries in bringing investors with capital together with firms that needed that capital. During this period there was no legal requirement to separate commercial banking from investment banking. As a result, banks could use the deposits from the commercial side of their business to provide capital that could be used for the funding of the investment side of their business.

In 1913, the Pujo Money Trust Investigation Committee of Congress determined unanimously that a small conspiratorial group of financiers had consolidated their control of numerous industries by the abuse of the public trust in the United States.

The committee report revealed that officers of J.P. Morgan & Co. sat on the boards of directors of 112 corporations with a market capitalization of $22.5 billion when the New York Stock Exchange only had a total capitalization of about $25.5 billion.

The committee report also revealed that a handful of men had manipulative control of the New York Stock Exchange and had attempted to evade interstate trade laws. The findings of this report resulted in the passage of the Clayton Antitrust Act in 1914.

As a precursor to the Federal Reserve System, this article reveals that the Panic of 1907 resulted when bank depositors tried to withdraw their money faster than some banks could pay it out, and a private conglomerate of investors decided to become “lenders of last resort’ which saved the troubled banks. Since this effort by the private investors succeeded in stopping the panic, there were requests for a federal agency to provide the same service.

On December 23, 1913, Congress passed the Federal Reserve Act, which created the Federal Reserve System as a new central bank to serve as a “lender of last resort” to banks that developed a liquidity crisis when too many depositors demanded their money. The Federal Reserve System (FED) is owned by the banks and is supervised by a seven-member Federal Reserve Board, whose members are appointed by the President and confirmed by the Senate.

The Federal Reserve Act of 1913 was created for the sole purpose of protecting the banks (not the American people), especially the major banks, as they are creating money “out of thin air” through a system called “Fractional-Reserve Banking,” which will be explained below. The success of the banks at dumping “free money” into the American economy to create inflation, and manipulating the Stock Market to create enormous profits for themselves, while devastating American families and the Federal Budget, will also be discussed below.

Note: The passage of the Federal Reserve Act in 1913 by our government can be compared to fearful shepherds who abandoned the sheepfold and allowed bears, lions, and wolves to come in and attack the sheep. The news media can be compared to bystanders who continually report the demise of the sheep, without warning the sheep that the predators are coming, and without realizing that when the predators have gained control of the sheep, they will turn back and start attacking the bystanders and the trembling shepherds.

2. How the Debt/Credit-Based Monetary System Works. Our current Debt/Credit-Based Monetary System is part of the system established by the Federal Reserve Act of 1913, which resulted in a clever legal scam, which is inadvertently backed by our federal government, that steals financial resources from the middle classes and the poor people of this country and transfers them to the rich and powerful banking industry and other monopolies.

The Federal Reserve System, which is owned by the banks, launders the “new money” created by the banks “out of thin air” at a rate of about 9 new dollars for every 1 existing dollar deposited in each bank. This “new money” is covered by Federal Reserve Notes issued by the U.S. Department of the Treasury which are sold on the open market and become a part of the public debt.

According to the website, (Pragcap-Understanding Inside and Outside Money. n.d.), the primary sources of private money in the American economy are deposits in the accounts of private banks, but most of these bank deposits do not come from the bank’s customers. Most of these deposits are created “out of thin air” by a process called fractional-reserve banking which is the source of loans to businesses and the public.

Fractional reserve banking is a banking system in which only a fraction of a bank’s deposits are backed by actual cash on hand that is available for withdrawal by the bank’s customers. The banks are only required to keep a certain reserve amount of the cash received from depositors on hand and available for withdrawal, which is controlled by the Federal Reserve and for most banks is about 10%. This means that approximately 90% of the money that banks are loaning to the public and businesses is “created out of thin air.”

The formula used to calculate the total amount of private money that can be created from each deposit is Total Money Created = Initial Deposit X (1/Reserve Requirement). For a deposit of $100,000 with a 10% reserve requirement: Total Money Created = $100,000 X (1/.10) = $1,000,000. Since the additional $900,000 is created “out of thin air” and not backed by any labor or assets, it contributes directly to the inflation of the money supply.

The individual depositor who deposits $100,000 of earned income into the bank will usually be paid less than 1% interest by the bank, but the bank will collect from 4% on mortgage loans up to 30% for credit cards from the $900,000 of unsupported money created “out of thin air.”

Banks can control the private money supply of the nation and the Stock Market by the number of loans they make to businesses and the public and by foreclosing on loans that do not meet their desired objectives or refusing to make loans that are needed for growth in the economy.

3. The Devastating Impact of the Debt/Credit-Based Monetary System on the Public. Due to their enormous holdings in the Stock Market, the banks and other large institutions can pull money out of or put money into the Stock Market to cause it to fluctuate and create enormous profits for themselves while devastating the investments of the American public and smaller investors.

Appendix 6A contains quotes about the national impacts of this money power from the founders of our nation, former presidents, former congressmen, former leaders of national and international banks, and former world leaders, dictators, and others.

From these quotes, you can see that this legal scam of the American people has been going on since the early years of our democracy, and there are indications that we are headed toward another financial crisis that will destroy our democracy and lead to world domination by a very few very greedy people.

Appendix 6B shows how the reports of the three major credit bureaus can have a continuous negative impact on a borrower’s credit score. When a borrower has negotiated with their lenders to pay off their credit card debts over a four- to five-year period and have paid off the debts, the credit bureaus report that the lenders have written off 100% of the credit card debts, but the actual write-offs have been much less than 100% in the settlements with the borrower.

In this true example, the write-offs to all but two of the lenders ranged from 3% to 49%, with an average of 20.8%. Instead of defaulting on his family’s credit card debts, the borrower negotiated with the lenders and paid an average of 79.2% of the original credit card debt, which should reflect an improvement in the borrower’s creditworthiness and credit score. This is especially true since the lenders have created the money that they loaned “out of thin air.” After paying off over $72,000 in credit card debt representing 79.2% of the original debt, the credit scores from the three major credit bureaus have not improved significantly.

Appendix 6C is a true example of how banks use online bill pay accounts to extract excessive interest rates from their customers. Many bank customers will have their employment checks and retirement checks deposited directly into their bank accounts. They will also have their bills paid directly from their bank accounts. The banks allow very little float (time) between the time a deposit is received and the time a customer’s bill is received for payment.

In the past, banks allowed deposits received at least by the end of the business day to pay for all bills received for payment during the business day. Today, some banks only allow deposits received by a certain time of day (long before midnight) to be used for payments for bills received during the business day, and other banks use a first-come-first-serve basis between deposits and payments. In most cases, the bank customer has no control over when direct deposits will be received by the bank or when the customer’s creditors will present bills to the bank for payment.

When there is a discrepancy between the time of deposit and the time a bill is presented for payment or when funds are not immediately available for payment of a bill, the bank will automatically pay the bill and charge the bank customer a flat fee. As shown in the above example, the flat fee usually represents an excessive interest charge by the bank. In this true example, the interest rates ranged from 381.9% to 14% with an average of 66.9%.

Appendix 6D is an analysis of wealth distribution within major countries using the Gini Coefficient, which is often used to determine wealth inequality within a country. The higher the Gini percentage, the more unequal the wealth distribution is between the rich and the poor.

The country of Brunei had the highest Gini coefficient in 2021 (91.6%), therefore the wealth distribution in Brunei is vastly unequal. Slovakia had the lowest Gini coefficient in 2021 (50.3%) out of all countries, which makes Slovakia the most equal country in terms of wealth distribution.

The Gini percentage for America is one of the highest in the world. At 85.0%, it is only 2.8% less than the 87.8% for Russia, 14.6% more than the 70.4% for China, and 2.7% more than the 82.3% for India, which are the two most populous nations in the world.

4. The Devastating Impact of the Debt/Credit-Based Monetary System on the Economy. Due to the enormous amount of interest charged by the five major banks and other lending institutions for money created “out of thin air,” they can invest in and have some influence over every major company in the U.S. Stock Market and many international markets. And since the banks are making loans to the public and businesses ‘out of thin air,” they can invest and hoard virtually all their net profits in the U.S. Stock Markets and other international markets.

This “new money” with no intrinsic value is pumped into the economy in the form of loans to individuals and businesses, which increases the public and private debt and inflates the money supply and the Stock Market. The Federal Reserve Notes, which are continually being sold on the open market to support the “new money,” increase the public debt and make it very difficult to balance the federal budget and pay off the public debt. Businesses, especially monopolies, raise the prices of their goods and services each year to keep up with this inflated money supply, which causes prices to double in America about every ten years.

When the public and private debt from this “new money” are growing faster than the GDP of the nation, which has been the case in recent years, a financial crisis occurs as the “new money” loans become due because many individuals and businesses are not able to make payments. The banks foreclose on the “new money” loans, and many individuals lose their homes and property and many businesses become bankrupt, which also causes individuals to lose their savings and pensions.

During these fabricated business cycles, the Federal Reserve protects most of the banks that are hurt by each financial crisis by providing them with loans to cover any runs on their deposits. In addition, the national banks are paid a flat 6% dividend by the Federal Reserve on the shares they own in the Federal Reserve banks.

Foreign governments purchase a large percentage of the notes being sold by the Treasury. In 2018, foreign governments owned about 39.4% of the public debt, down from 45.1% from the analysis in 2016. This legal scam of the American people has been going on for over a century, and there are indications that we are headed toward another financial crisis even worse than the 2008-2010 crisis. Following is a synopsis from a website of how this scam contributed to the 2008-2010 financial crisis.

5. How Money Power Caused the 2008-2010 Crisis. According to the website (Thrivemovement-Banking History-Follow the Money. n.d.), in 1999 Congress passed the Financial Services Modernization Act, which repealed part of the Glass-Steagall Act of 1933 and allowed investment banks, commercial banks, securities firms, and insurance companies to merge.

From 2000 to 2003 the Federal Reserve extended easy credit, lowered the Fed Fund Rate from 6.5% to 1%, and set up for another financial “boom.” On April 28, 2004, five of the largest investment banks met with members of the Securities and Exchange Commission (SEC) and urged them to allow the banks to regulate themselves, so they could determine how much money they could create “out of thin air” to loan into circulation.

The SEC allowed the banks to regulate themselves and create as much debt as they wanted, which unleashed billions of dollars for high-risk investment packages. From 2004 to 2005 the Federal Reserve set off a new “bust” by making loans and adjustable-rate mortgages more expensive and raising the Fed Fund Rate to 5.25%.

From 2007 to 2010 the worst financial crisis since the Great Depression occurred. This crisis affected people all over the world and millions lost their homes, jobs, and retirement funds. Many of the smaller banks were absorbed by bigger banks to consolidate wealth further and eliminate competition.

J.P. Morgan Chase bought Washington Mutual Bank, the largest bank to fail in the history of the United States, and Bear Sterns, the fifth largest investment bank. In 2010 J.P. Morgan Chase made a record $17.4 Billion in profits.

Note: President Abraham Lincoln had to deal with the physical slavery of 12.6% of the U.S. population, which was threatening to split our democracy. We must now deal with the financial slavery of over 90% of the U.S. population, which is threatening to destroy our democracy and our whole system of government.

6. Speculative Impact of Money Power on the American Leadership. This website also reveals that there is a pattern of American Presidents being assassinated after challenging the central bankers and their monopoly on money. On January 30, 1835, President Andrew Jackson, the first president to challenge and defeat the money monopoly, escaped assassination when the assassin’s gun misfired twice.

President Lincoln, who overruled debt-based money and issued Greenbacks to fund the Civil War, was assassinated on April 15, 1865. President James Garfield, a staunch proponent of “honest money” backed by gold and silver, was assassinated on July 2, 1881, after four months in office.

President John F. Kennedy issued Executive Order 11110 on June 4, 1963, which authorized the U.S. Treasury to issue silver certificates, which would threaten the Federal Reserve’s monopoly on money. He was assassinated on November 22, 1963. President Johnson reversed the order in December 1963 and restored sole monetary power to the Federal Reserve banks.

7. Proposed Asset/Capital-Based Monetary System. Our current monetary system is designed to create debt, credit, and usury (interest) for the banks and other money lenders in the system, and the major players create their greatest profits and wealth when the other twelve industrial sectors and the smaller players within their own sector are having financial problems or when there is a crisis in the national economy or when there is a war.

This has created an economy that is based on unsupported debt from lending institutions (shifting sand), rather than concrete financial assets and capital (solid rocks). The result of this monopoly on money is the transfer of wealth from smaller businesses and the public to the banks, monopolies, and other major players in the economy. These major players have the power to manipulate the private money supply and the Stock Market to suit their private objectives, with limited governmental oversight, for continuous gain in good times and bad times.

Appendix 7A is a synopsis of the Total Public Debt from 1940 to 2018, which shows that the public debt increased from 51.6% of Gross Domestic Product (GDP) in 1940, when World War II was starting, to 106.1% of GDP in 2018. (Note: Gross Domestic Product (GDP) is the total value of everything produced in the country in one year)

Appendix 7B is a summary of Federal Budget Performance from 1789 to 2018. In the 30 years from 1900, 13 years before the Federal Reserve Act, to the year 1930, 17 years after the Act, the federal government had good budget performance with only 11 relatively small budget deficits, except for the 3 that occurred during World War I.

When the Act was passed, it was granted a 20-year charter, which was to be renewed in 1933. However, on February 25, 1927, 14 years later, this clause was amended to allow the Act to continue until dissolved by Congress. Two years later in 1929 the Great Depression occurred and federal budget deficits have been escalating continuously since that time, and there have been only 13 budget surpluses in the 89 years between 1929 and 2018.

Appendix 7C provides a history of America’s economic performance indicators from 1974 to 2018 during the terms of the different Presidents. In the 44 years since 1974, there have been only 4 budget surpluses, which were during the presidency of President Clinton, and the Total Public Debt has increased from 32.6% of GDP in 1974 to 106.1% of GDP in 2018, and the public debt has been growing faster than GDP.

This means that the public debt will continue to grow, and unless we balance the federal budget and begin paying down this debt, it will always be there to impede the growth of the American economy. There is an even greater crisis with private debt because private debt is almost double the size of public debt and it has a greater impact than public debt on the national economy and the lives of the American people.

Appendix 7D is a summary of private sector debt as a percentage of Gross Domestic Product (GDP) for 33 major countries from 1999 to 2018. This summary shows that the private sector debt as a percentage of GDP for the U.S. grew from 174.1% in 1999 to 196.7% in 2018. During that same period the U.S. public sector debt as a percentage of GDP grew from 59.1% to 106.1% in 2018.

To address this inflationary debt crisis in America, it is proposed that the Federal Government convert from the current Debt/Credit-Based Monetary System with unsupported debt from lending institutions (shifting sand), to an Asset/Capital-Based Monetary System with the support of the concrete assets and capital of the Federal Government, which are owned by the American people (solid rocks).

Appendix 8A is an estimate of the 2018 non-operational balance sheet of the Federal Government which reveals that the Federal Government owned about 21.5 trillion dollars in non-operational assets of which about $3.7 trillion were relatively liquid assets in 2018. Non-operational assets will be defined as assets that do not have to be replaced periodically, such as buildings and land.

The M2 money supply needed to support the national economy was about 14.2 trillion dollars in 2018. In the proposed Asset/Capital-Based Monetary System, some of the money needed to support the M2 Money Supply would be issued by the Department of the Treasury and would be backed by the assets of the Federal Government and the rest would come from money backed by labor, materials, assets, and capital and by investments by the public and other institutions.

The banks and other lending institutions, and the Federal Government would borrow money from the Department of the Treasury to fund their operations at interest rates based on established criteria, which should be no less than 2% for mortgages and loans to stimulate the economy and no less than 6% for credit card loans.

The interest received by the Treasury from the private banks, the Federal Government (until the operational budget is balanced), and other lending institutions would be used to pay off the national debt, fund new governmental infrastructure projects that benefit the people, and reduce taxes to businesses and the people. It is proposed that national interest rate ceilings be established by Congress for all sources of credit and loans in the economy.

To regain control of the nation’s money supply, it is proposed that the Federal Government negotiate with the private banks to gain control of all the shares of the Federal Reserve Banks, transfer the twelve Federal Reserve Banks to the Department of the Treasury, and then develop a process for the conversion of existing deposits and loans from the Debt/Credit-Based Monetary System to the new Asset/Capital-Based Monetary System, without creating chaos and distress in the American economy.

First, it is proposed that Congress rescind the Federal Reserve Act of 1913 which gives the banks the authority to control the supply of money to the economy. Second, it is proposed that the banks and other lending institutions be required to discontinue fractional-reserve banking and begin making future loans with money that is supported 100% by assets and/or capital.

The future bank loans would come from actual deposits, the money the banks have been hoarding in the Stock Market, and loans from the 12 Federal Reserve Banks. The money loaned by the 12 Federal Reserve Banks would be supported by the non-operational assets and capital of the Federal Government, which are owned by the American people.

In the negotiations with the national banks, it is proposed that audits be conducted of the assets of the twelve Federal Reserve Banks, and audits be conducted of the outstanding loans of all the banks and other lending institutions doing business in America to the public, businesses, and other countries to determine the total value of all outstanding loans.

Then, it is proposed that the gold and silver assets of all the private banks and other institutions, plus the valuation of the assets of the 12 Federal Reserve Banks, be subtracted from the total value of all the outstanding loans of the banks and other lending institutions in America. The assets of the 12 Federal Reserve Banks and the gold and silver assets of the banks and other lending institutions would be transferred to the Department of the Treasury.

The remaining balance would consist of virtually all the outstanding loans that are not supported by assets and/or capital. These remaining outstanding loans would then be distributed to the banks and other lending institutions based on the audits of the institutions. Those banks and other institutions with partial ownership in the FED and with gold and silver assets would have their outstanding loans reduced by the greatest amount.

The banks and other lending institutions would then immediately begin paying interest to the Department of the Treasury for the net outstanding loans from the audits, plus any future loans, based on established interest rates and criteria. They would also be required to pay reasonable federal income taxes on their profits, as other American citizens are required to do.

8. Proposed Monetary Policy/Appropriation Committees to Control Inflation. Appendix 8C is a proposed list of fifteen (15) Industrial Budget Sectors based on IRS Activity Codes, which would be assigned to each of the fifteen (15) Cabinet Departments that report to the President.

To ensure that all fifteen industrial sectors obtain the money to support their operations, the Federal Government would set up Monetary Policy/Appropriation Committees to represent each of the fifteen industrial sectors to ensure that each sector receives enough money to satisfy their demand for capital, but not enough to fuel inflation.

At least one of the twelve Federal Reserve Banks would be assigned to each of the industrial sectors. The economic performance indicators that are now used to monitor the performance of the nation (Appendix 7C) would also be used to monitor the performance of each industrial sector and each Monetary Policy/Appropriation Committee.

The Monetary Policy/Appropriation Committee for each industrial sector would include members of Congress and the Department of the Treasury who would have joint oversight of the Federal Reserve Banks, at least one Federal Reserve Bank that specializes in the sector, representatives from the private banking industry who would be making loans to the sector, and one or more industrial representatives from a cross-section of the sector.

To resolve disputes, each committee would hear testimonies as necessary from those within the sector to ensure that everyone is treated fairly. The objectives of each of the Monetary Policy/Appropriation Committees would be to:

Ensure that there is competition within each industrial sector,
Ensure that there is funding to support the quantified demand of each sector without fueling inflation,
Ensure that businesses and the public are protected from exploitation and monopolistic practices,
Ensure that decisions by the committee are based on fairness to all concerned rather than special privileges or bribery, and
Establish policies that promote peace, prosperity, and a better standard of living for the American people, as well as, the global community.

If the banking industry should attempt to disrupt the economy, as in the past, by refusing to make loans or foreclosing on existing loans, the federally-owned Federal Reserve Banks would be the “lender of last resort.” This would ensure that businesses and the public can get the money needed to support their operations and their families, provided they can meet established criteria which should be unbiased and available to everyone, including low-income families.

9. Provide Periodic Financial Reports to the Public. Appendix 8B is a proposed organizational chart for the establishment of a balanced and unified budget and national financial reports. In this case, a unified budget means that the House, Senate, and the President would work together in implementing the annual federal budget with each performing their constitutional duties during the budget year. It is based on the following assumptions:

The Executive Branch of Government would have the primary responsibility for planning and developing the Federal Budget;
The conversion from the Debt/Credit-Based Monetary System to an Asset/Capital-Based Monetary System;
The transfer of the Federal Reserve Banks to the Department of the Treasury;
The establishment of 15 Industrial Sectors for control of the money supply to the economy;
The establishment of Monetary Policy/Appropriation Committees for each Industrial Sector to control inflation and assure that each industrial sector is adequately funded; and
The reporting of the Independent Governmental Agencies and Government Corporations to one of the fifteen Cabinet Officers for budgetary and financial reporting purposes.

To control government spending, achieve a balanced federal budget, and gain the confidence of the American people:

Limit the amount of money that can be issued against federal assets based on established criteria;
Ensure that any money entering or leaving the U.S. monetary system is backed by labor, materials, tangible assets, or capital by use of the PPIS to monitor transactions;
Provide periodic financial reports of federal operations to the American people that are consistent with established business practices; and
Survey state governments annually for their top priority needs from each of the Cabinet Departments and allocate federal services to all the states in a way that maintains a fair-minded and balanced budget.

Appendix 9 is a proposed history of the federal budget by department and agency from 2008 to 2018. It is designed to show how the restructured summary budget would look when compared to the Budget/Financial Organization Chart (Appendix 8B) and how the financial reports to the public might be structured. It also shows the estimated loss of federal revenue from potential interest (4% estimate) on the Federal Reserve System debt generated from money created “out of thin air,” which is estimated to be $92.5 billion in 2018. With these reforms in place, we should be able to balance the Federal Budget in less than four years.

For this analysis, it is estimated that the average interest rate for banks and other lending institutions for the combination of mortgage interest, economic stimulus interest, and credit card interest would be about 4%. It is assumed that the minimum Federal Reserve interest rate for mortgage and economic stimulus loans would be 2%, and the minimum interest rate for credit card loans would be 6%. The PPIS would be used to track and monitor the progress of these initiatives.

B. How Can We Increase Competition in the American Oil Industry and Other Monopolistic Industries?

1. The Oil Industry and Monopolies are Major Sources of Inflation. Another major source of inflation in the American economy is the price of gasoline and diesel fuel at the pump. The American oil industry can continuously raise or adjust gasoline prices with very little resistance from our leadership in Washington on behalf of the American people and the other affected industries because there is very little true competition in the oil industry.

The banking industry and the oil industry are the main sources of inflation in the American economy, which causes the prices of goods and services to the American people to double about every ten years. They also cause taxes and insurance rates to increase each year, which causes the escrow on mortgage loans and mortgage payments to increase each year. Many major industries and monopolies raise their prices each year in anticipation of the inflation from these two sources.

To control the inflation caused by the major oil companies, the Federal Government must find ways to increase the competition in the oil industry, which would prevent the oil industry from arbitrarily raising the price of fuel at the pump to generate enormous profits for themselves with devastating impacts on American families.

The price of gasoline affects virtually every man, woman, and child in this country because almost all the products and services we consume require the use of gasoline or diesel fuel at some point in the delivery process. Consequently, our demand for oil is relatively inelastic and the normal market forces of supply and demand do not always apply, because there is very little true competition in the oil marketplace.

The price increases of gasoline have an immediate impact on every American household, which causes the average citizen to blame the leadership in Washington for the inflated prices rather than the oil companies. It is much easier and more profitable for the news media to blame the government rather than reporting the root causes of the inflation, because it may adversely impact advertising revenue and profits if they expose this powerful industry.

The major oil companies virtually eliminated their competition from independent oil companies during the 1973 OPEC Oil Embargo and by subsequent monopolistic industry consolidations. Consequently, there is very little competition in the oil industry and oil companies can charge almost any price they choose when there are no other external price controls. This is evident because gasoline prices usually change instantly throughout the economy.

It is very unlikely that the use of fossil fuels will be substantially reduced in the next century because the current fossil fuel technology will probably continue to be used in emerging countries and the aviation industry. The goal of our environmental strategies should be to reverse the current trend by removing significantly more CO2 from the environment than is added by the burning of fossil fuels and other sources.

To stabilize crude oil and gasoline prices in America and the other countries in North, Central, and South America, there must be competition for the major oil companies who are operating in America and these other countries.

Appendix 7E shows the oil reserves of the top 20 countries in the world. Two of the top three are in our hemisphere: Venezuela is number 1 and Canada is number 3. Other countries with relatively large reserves in our hemisphere are Brazil, Mexico, Ecuador, Argentina, and Columbia.

2. Competition Proposal. It is proposed that the Federal Government work to improve relations with these and other hemispherical countries and provide tax incentives for independent American oil companies and other American industries to invest in these countries to enhance their economies and provide their citizens alternatives to the dangers of illegal drug trafficking and human trafficking, which are the root causes of illegal immigration from these countries to America.

The independent American oil companies operating in these hemispherical countries would be able to supply crude oil to independent oil refineries in America that would supply gasoline and diesel fuel to independent gas stations in America in competition with the major oil companies to help stabilize oil and gasoline prices and maintain oil company wage rates in America.

These independent oil companies could also sell crude oil and gasoline products within these countries and to other countries around the world from their bases within these countries to help stabilize worldwide gasoline prices and maintain wage rates in each country that they do business with.

It is also proposed that the Federal Government establish bilateral agreements with these hemispherical oil-producing countries and other oil-producing countries around the world to purchase or sell a certain amount of crude oil at a set price to deal with potential national emergencies in each country.

3. Maintain Wage Rates in America and Foreign Countries. The independent American oil companies and other American industries in these foreign countries would conform to the wage and price systems in each country where they are producing their products, but these foreign-produced products could face selective tariffs if they are sold in America at prices that impinge on American jobs and the wage and price systems in America. The objective of this foreign policy would be to maintain full employment and good-paying jobs in America while improving the economies of other nations around the world.

For major American manufacturers to compete with the lower wage rates in other countries, it is proposed that American manufacturing industries establish manufacturing plants in foreign countries, which are staffed primarily by the citizens of those countries. The wages paid in those plants would be compatible with the other wage rates in the countries, and their citizens would be motivated to buy the American products that are manufactured in their country.

4. Improve Relations Between Management and Labor. To maintain competitive prices and wages in America, management and labor would need to agree to expand the use of automation in American plants and design their products to be upgradeable as new technology is developed. Then many of the American jobs lost on the new production and new technology side of the business would be added to the repair and upgrade side of the business, while, at the same time, reducing the quantity of obsolete products going to landfills.

It is also proposed that management and labor in all the major American companies and industries work together to establish baseline salaries, wages, other operational expenses, and promotional criteria for all employees in each industry, which would determine the breakeven point for profitability within each company. Then criteria could be established that would allow employees to participate in the profitability of each company.

Labor representatives could be on the company board of directors to offer suggestions for competitive improvements and to deal with company problems. This would allow labor and management to work together as a team to improve the competition and profitability of the company within its industry, which could virtually eliminate the need for large-scale labor strikes.

Exhibit 3 - Fix Our Money

Appendix 6A - Quotes About Money Power in America and Elsewhere

Appendix 6B - Excessive Debt Write-Offs by the Three Major Credit Bureaus

Appendix 6C - Excessive Bank Interest Charges

Appendix 6D - World Wealth Inequality Gini Coefficient (%)

Appendix 7A - U.S. Federal Debt 1940 – 2018

Appendix 7B - U.S. Federal Budget Performance 1789 – 2018

Appendix 7C - U.S. Economic Indicators 1974 – 2018

Appendix 7D - Private Debt of 33 Countries Including the U.S. 1999-2018

Appendix 8A - Estimated U.S. Federal Non-Operational Balance Sheet 2018

Appendix 8B - Proposed U.S. Federal Budget/Financial Organization Chart

Appendix 8C - Proposed U.S. Budgetary Industrial Sectors