Creating jobs - why the US Government should coin silver, gold and copper coins from bullion stored in Ft Knox and use it to make low interest loans available to small businesses
Aug 28 2011
Small businesses are paying exorbitant fees with the high interest rates to use credit cards being charged by Visa/MC, Dais and AMX. Congress could and should help spur the economy by offering lines of credit to small businesses at very low interest rates. The lines of credit could be backed by newly minted gold and silver coins, which is more than what the credit card companies offer. Congress could and should authorize the minting of two trillion dollars worth of gold, silver and copper coins from bullion stock now in Fort Knox and set the face value of the coins at 50 to 100 per cent above the market value of the metal in the coins. In other words, with silver at $40 a ounce, A $100 Silver coin (legal tender value) should be minted with 1 to 1.5 ounces of 99.9 percent pure silver in each coin. For gold, a one ounce gold coin should be minted with a face value of $2500 per coin, as the current commodity value of gold is around $1500 an ounce. A one ounce copper coin with a $20 legal tender value would be very profitable for the U.S. government to coin. By making the face or legal tender value higher than the value of the metal in the coins, they will circulate as money for the next 10 or 15 years.
After minting all gold, silver and copper bullion in Ft Knox into coins, the Federal Government should use some of the newly minted coins to purchase enough gold, silver and copper bullion to replace all that was removed from Fort Knox for the initial coinage. The profit or difference from the face legal tender value of the coins minus the cost of making the coins, (the metal's current market value can), then be deposited in the governments bank account at the Federal Reserve.
By repeating the above process several times over, the US Government could build-up a surplus over time of over two trillion dollars in its account. About 400 billion of that could be made immediately available for low interest loans (one percent per annum) to small businesses for business expansion and operations or to pay off higher interest rate credit card debt. This would help small businesses fuel an economic expansion. In addition, a portion of this newly minted money could be allocated for low interest loans for college students.
Plastic (digital) money: To give the credit companies of Visa/MC/DIS and AMX some competition and stimulate an economic recovery, the Federal Reserve should also be mandated by Congress to make low interest rate credit cards available to consumers through local credit unions and banks at an annual interest rate not to exceed 3 percent. While the Federal Reserve Banks cannot print money, they can make bookkeeping or digital money out of thin air with a few strokes of a pen or on a computer keyboard. They can do this because they are independent and regulate themselves. They can determine how much credit to make available publicly and privately and its cost. Right now, during this period of credit contraction, deflation and high unemployment, it takes an inflation (an increase) of the money supply in the pockets of consumers to stimulate the purchase of products and services that will, in turn, create new jobs.
Instead of paying interest to privately owned banks (usually Class A banks) to use the credit (checkbook money) that they also create out of thin air, Congress could also authorize the US Treasury to borrow newly printed currency directly from the Bureau of Mint and Engraving, and, of course, interest free. In one or more ways suggested in this article to finance deficits without borrowing credit or increasing taxes or increasing the debt limit, and, in addition to cutting spending, and reducing excessive red tape and government regulations that burden small business, the U.S. Government would no longer add to the national debt while the debt itself is gradually purchased and owned by the Federal Reserve. The debt we owe to China (1.2 trillion) could easily be paid off within the first 6 months of a repurchase program if we use newly coined, printed or digital money at a rate of 200 billion dollars per month.
A sovereign government and the U.S. Government was originally set up as such, has the power to print or coin money and has no need to ever borrow what it can create with its own printing presses. Under the US Constitution, that power was so delegated to Congress. Congress, therefore, has no need to ever borrow money to finance its expenditures. Therefore, any constitutional amendment for a balanced budget must also include a clause to prohibit the payment of interest on any US currency borrowed by the U.S. Government. Since it cost taxpayers no more money to print a $100 bill than a $100 bond, it is absurd to any rational thinking human being that the U.S. Government continues to coddle bankers in the financial markets by printing bonds for their bottom line instead of a debt-free currency that benefits everyone equally. All things considered, it is also indeed absurd, that we even have a national debt.
To all readers: What do you think of these proposals? Send me an email (firstname.lastname@example.org) Will you share this article with your friends? with your elected members of Congress? To all members of Congress - what are your thoughts about these proposals to pay off the national debt and get Americans back to work?