The National Cooperative Bank, US Code Title 12, Chapter 31
Posted by Cooperativist on Tue, 06/17/2008 - 01:15 inIn 1978 Congress created under Title 12 the Banking Code, Chapter 31 the National Cooperative Bank.
The economic and financial structure of this country in combination with the Nation’s natural resources and the productivity of the American people has produced one of the highest average standards of living in the world. However, the Nation has been experiencing inflation and unemployment together with an increasing gap between producers’ prices and consumers’ purchasing power. This has resulted in a growing number of our citizens, especially the elderly, the poor, and the inner city resident, being unable to share in the fruits of our Nation’s highly efficient economic system. The Congress finds that user-owned cooperatives are a proven method for broadening ownership and control of the economic organizations, increasing the number of market participants, narrowing price spreads, raising the quality of goods and services available to their membership, and building bridges between producers and consumers, and their members and patrons.
Campaign for liberty says that part of its mission is for us to discuss issues. I have worked for the last seven years in our community developing cooperatives in the areas of finance, employment, transportation, housing, child and health care. As I understand the way banks create money that we the people have allowed for profit banks to make a lot of money off our labor. I would like to discuss the idea of utilizing this finance vehicle called the National Cooperative Bank. As I understand it cooperative banks are like credit unions in which they are not for profits. I understand that a cooperative bank is a not for profit which has the ability to provide funding for commercial activities.
Yes we have gotten a raw deal from these banks, why not organize our own cooperative banks throughout our lands in every county seat. Dr. Paul through his vision raised over $6 million in a day. What if he and others like Dennis Kucinich sat on the board of this bank and explained to you that by you investing in your future and this cooperative financial vehicle that we could take half or more of the time off our mortgages.
The boomer generation and the AARP generations are over one third of the nation. If you could take years off your mortgage and help the country create low cost alternative local resources in employment, transportation, housing, insurance, child and health care would you not invest?
Yes I agree fractional reserve banking in the hands of for profit banks has done this country an injustice but, we are the numbers, our labor is the power to make substantive change in the way America works. Discussion please.
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You fellows are talking about cooperatives (not too far removed from credit unions) but Tom Mullen put his finger on it: until fractional-reserve banking is outlawed, you're pissin' in the wind.
Here is our reality in a nutshell:
'Fractional-reserve banking being outlawed' is really not necessary; fraud is already illegal. But we have a deeply corrupt Congress that enables fraud in this form. Not incidentally, Congress has also colluded for nearly a century with a private counterfeiting cartel, buying their currency products and forcing all of us to use them exclusively.
So if I just arrived from a desert island, and if I would just read the U.S. Constitution and consider the facts above, I would wonder what kind of idiots kept electing people that continue to perpetrate such high crimes in government in collusion with bankers and paper-printers.
Stephen Zarlenga, founder of the American Monetary Institute, has written an excellent tome (almost 800 pages, all good) on the history of money and credit, called The Lost Science of Money which I highly recommend. In this work, Zarlenga proposes a Monetary Reform Act that (although his background was in selling gold futures) does NOT peg to specie. In fact, the author posits that the Constitution's very silence on HOW the Congress shall "regulate the value thereof" leaves the field open for an ethical/legal mechanism that does not peg the national currency to a commodity such as precious metal that is easily cornered and manipulated by market-cornerers anyway.
The same ethical/economic case is made by attorney Pat Carmack in his Monetary Reform Act, which can be found on the website called "The Money Masters".
Gold bugs might balk at the concept, but they should read Zarlenga's book before casting the idea aside out of hand. The idea of a legal and ethical basis for a national currency versus a commodity basis has merit, since in today's FOREX world the market will beat dishonest money into submission soon or late anyway. You come back to meritocracy; to production and inherent 'gross national resource' value, including intellectual.
Numa, the second king of ancient Rome, made bronze coinage the legal tender for the entire Roman empire, even though Rome was in possession of a great deal of gold and silver. We get the word 'numismatics' (study of currency) from old Numa, a sharp cookie.
The banksters are busted; people are seeing fraud for what it is, in all sectors of economies in all economies of the world. The "fat banker" used to be able to pull a good deal of wool over Jones' eyes before Jones left the bank (and especially after). The multi-generational banking families who own the lions' share of the Fed banks' stock used to be able to count on their friendly neighborhood puppet in Congress.
But today, any American with access to a computer has virtually the entire Library of Congress just a key-tap away -- even in his shirt pocket. Information opens new possibilties for liberty to a formerly duped population. Things are not guaranteed to be so rosy for entire fraudster industries tomorrow.
To put it another way: short your bank stock.
www.americanglasnost.blogspot.com
www.america-again.blogspot.com
After finishing Money, Bank Credit, and Economic Cycles by DeSoto (available as free e-book from Mises.org) he is right on.
I have been thinking of how to start a 100% reserve ratio bank modeled on the most stable and respected bank in history - The Bank of Amsterdam (founded in 1609) which lasted for about 150 years as a full reserve entity.
Everyone's bank accounts are being used to destroy our currency and economy through fractional reserve practices. We need to withdraw our money from this destructive system as a matter of self preservation. However, this would result in several sacrifices; foregoing modern banking conveniences, foregoing loans, foregoing interest earned on savings.
Recently, I realized that peer to peer lending sites like Prosper.com already have a viable business model that will eliminate two of the three deficiencies listed above. Perhaps bills could be paid with a Credit Card (paid off in full each month) rather than with a check? I not sure how the "credit" is managed for CCs, is it also inflationary like a loan?
Anyway, I would love to participate in more discussion of how a stable and non-inflationary system could be developed.
That's interesting Tom,
So if I loan my deposit to the bank, I should not only not make a bank run, I should also not have that money (which I have loaned) for my own use, or to write checks on etc. Is that what you meant.
I think once you think about a 100% reserve ratio, the entire nature of the bank changes, so much so that it becomes a safekeeping bank that charges fees for its safekeeping service. If you are thinking of cooperative banks as 'providing financial capital' working as a non profit, and which is not going to 'lend' hte money that is deposited into it (100% reserve), then it must 'have money' apart from its deposits. Soon it begins to look like an 'investment' house that brings together members of the community that have capital, and allows them to invest their capital in the community (and therefore take risks of losing their capital) etc..
the system will not work very well as long as you are using currency that can lose its value by factors and events 'outside' the community... (some fat guy far away setting interest rates, some guys setting reserve ratios... other people investing in the community using central bank currency etc.).. My sense is that community currency must be part of the solution.
as long as the depositor acknowledges that he is loaning money to the bank for an agreed upon term, during which the money is no longer available to him. Then, the bank can loan out that money without creating new money. This is how a "savings account" (actually a loan from depositor to bank) can earn interest.
For checking accounts, it is a safekeeping account and the bank should charge a fee for the service.
With a 100% reserve ratio, there would never be a run on the bank, so no need for the "fat guy" in a central bank! LOL
Tom Mullen
www.tommullen.net
www.myspace.com/skepticsongs
I submit that we the owners of this proposed cooperative bank could set what ever reserves we wished. I personally believe that if Ron Paul along with his finance director, Dennis Kucinich and others that this bank would put the for profit banks and the government in a tail spin, while we would be build other cooperative investment organizations in the areas of employment, transportation, housing, child and health care.
popular during the 70s. But the powers-that-be brought them down. I can remember a cooperative market. It went broke, and not by any fault of it's own.
I support cooperatives, and think this Nationial Cooperative Bank is a good idea. But I have to rain on the party. Unless the neocons are unseated, it'll only be bought off in one way or another.
__________________
Freedom is an inside job
fractional reserve banking = money creation
Even when our money was backed by gold, we had periodic bank failure epidemics. That is why the call for a central bank kept recurring throughout our history. Why do banks continually fail? It is because they are allowed to practice fractional reserve banking. They are allowed to hold money in your bank account and tell you that it is constantly available to you, while that money has actually been lent out to somebody else. This has been the problem throughout history. There are written accounts of credit expansion and the problems of inflation set down by the ancient Assyrians.
If we eliminated the Federal Reserve today and went back to "free banking," we would have periodic bank failures just as we did during the free banking period in the United States from the Jackson administration to the Wilson administration. THen, there would again be calls for a central bank as a lender of last resort.
To free ourselves from this never-ending boom and bust cycle and the erosion of wealth it causes (for most people), we must require banks to keep a 100% reserve ratio. Advocates of the system will tell you that we wouldn't be able to have anything near the economic growth we've experienced with fractional reserve banking. That is a complete lie. The growth we've enjoyed has been DESPITE the practice of fractional reserve banking. The key to proving this is to take currency out of the equation. Our currency is not a constant, and the inflation adjustments are false. However, if you look at what things cost in terms of units of full time equivalents in employment or some commodity like wheat or gold, you get a better picture of when we've really grown and when we have not.
The calls for an end to the Fed are great, but they must be accompanied in each instance by calls for an end to fractional reserve banking, and a 100% reserve ratio. So long as bankers are able to lend money that doesn't exist, we will keep coming right back to where we are.
Tom Mullen
www.tommullen.net
www.myspace.com/skepticsongs
Tom, you hit the nail on the head again here. Actually, the currency and credit issue is tripartite:
1) We must make the Congress stop violating the law with its Federal Reserve scam, and own up to its constitutional duty to 'coin' the nation's currency and regulate its value;
2) We must outlaw the obviously immoral practice of institutionalised grand theft (a.k.a. fractional reserve banking) wherein anyone who owns a bank charter can "create money" out of mere computer keystrokes;
3) We must establish a national currency based on LAW and on an ethical/moral basis geared to PRODUCTION and to ACTUAL VALUE of resources and durable goods.
The reason I so highly recommended Stephen Zarlenga's book earlier is that it breaks the spell on your mind that banksters and gold bugs have had on humanity for most of history. Zarlenga goes all the way back to the first successful 'contrarian currency', instituted by the second king of Rome, Numa (716-672 B.C.), a currency made of bronze.
Rome had gold and silver in abundance, but Numa (shrewdly) used law and national custom to make Bronze the monetary metal of choice, rather than having to use a valued commodity that could be manipulated by those who held the most of it. Think of the ethical implications of this; it makes perfect sense.
Rome under Numa thus broke the hold of the rest of the world on the Roman economy; Rome was strong enough to have its own currency base, and Numa was shrewd enough to adopt it, and let the rest of the world do whatever they wanted. If you wanted to trade with Rome, you used bronze coin. This is why coin collecting is called numismatics incidentally. (I do not know if the Romans did the Numa-Numa dance in his honor, however.)
The Spartans did the same with iron coin, and of course most of the world does the same now with attractively-printed paper. But the key to understand is that America's currency presently consists of two kinds: the eponymous Federal Reserve note, which is manifestly illegal (repugnant to the Constitution's demand for America's currency) and the insidious "bank credit", which is the majority "currency" used every day in American life today, yet is manifestly fraudulent (i.e., is nothing at all, except a bank's ability to type numbers into a computer system and call it "money").
Until a critical mass of adult Americans can educate themselves sufficiently, and can courageously act upon what they know to be true and just, America's system of currency and credit will be based on the fraud and theft that have characterised the credit and banking industry from earliest European history.
The America Again! project is the simplest, most lawful and peaceful, and potentially the most effective project in self-government proposed in many generations. I do not say this because it was my idea; I say it because it is true. This simple project can be launched in any given town by just a handful of diligent citizens. It is "fun civics" and it is exciting for anyone who wants their kids to learn history, and to live history. It will enliven Independence Day all over America, and give every American a serious, meaningful role in the ethical and political future of the republic.
It calls for the abolition of the Federal Reserve; the adoption of a comprehensive Monetary Reform Act that will outlaw fractional-reserve banking, and will outlaw the Federal Reserve. It will force Congress to adopt a national currency that entails NO payments of interest to third parties. It entails the redux of The Militias of the Several States, which can bring new meaning and enjoyment to the lives of millions of young Americans who presently feel no franchise in citizenship (and can also provide a ready first-response force in every town and city in times of disasters or other threats).
Best of all, the America Again! project will create a nationwide court of public opinion to try the perennial, palpable violations of law that are perpetrated every day by the US Congress, and about which We the People have heretofore felt powerless to reform. We don't kick them out of office; we have the State Government take their worldly assets, and place them in the State Penitentiary for a long, long time.
There are two excellent Monetary Reform Act proposals on the table; one authored by Stephen Zarlenga (American Monetary Institute) and the other authored by Pat Carmack (featured at the website called 'The Money Masters'). Both of these pieces of draft legislation have tremendous promise to actually DO what Tom Mullen is here proposing: end fractional-reserve banking, outlaw the Federal Reserve, and force Congress to devise a sound, law-based (not commodity-based) currency.
www.america-again.blogspot.com
I don't think any issues involving banking or money will ever really be solved until we start using real money and sound monetary policies. We have to end the Federal Reserve's monopoly over this commodity before we can do this though.
Here is a commentary piece related to this discussion where the author believes the authors of the Constitution made a grave error in letting the government be involved with money as opposed to allowing it to be handled by the free market just like any other commodity. He of course recommends real money backed by gold.
http://www.kitco.com/ind/saville/jun172008.html
Although, our government has already surrendered their authority over monetary policy to a group of private banksters, and actually gave them a monopoly over it! So it's already privatized, we just need to break the monopoly. The Liberty dollar attempted to do this until the Feds confiscated all of those people's gold and silver money and the mint's equipment.
If we had multiple currencies backed by gold that were accepted everywhere in the country, that would be great! And as for the banksters, the National Cooperative Banks sound like a good idea for making it easier to finance new businesses, but this is something else that the theives will fight tooth and nail. They're already in the process of destroying and gobbling up what's left of the little guys who aren't in their little club so that they can eventually obtain a monoply over the entire banking industry to go along with their monoply on the monetary policy.
Ah yes, another man without a name. Such courage on this forum!!
Your quotes come from the website of Kitco, a dealer in precious metals. Thus your 'analysis' of the problem is not only demonstrably circular reasoning; it is self-serving. It begs the question of a "gold standard".
Although bipolar in their theories of government, Adam Smith and Karl Marx had identical monetary ethics: treat currencies as commodities rather than an ethical measure of the production and worth of a population. When you commodify a currency (what the gold bugs want) you move into the realm of those who mine, refine, and trade in that commodity, regardless how scarce or plentiful it may be.
Let me put it another way. Although productive human beings can grow, fashion, repair, and build things of real value in life, you can't eat gold or silver. You can't afford enough of it to make a house, car, tractor, or drill press out of it. It has no actual value in an ethical sense (productivity); only as a 'peg commodity'. Thus it is no more intrinsically 'worthy' as a currency peg than is, say, mesquite wood -- except that it is relatively rare and has become a subject of lust among humankind (like, say, diamonds).
Aside from the ancillary ethical/spiritual issues, there is an arbitrary standard inherent in commodifying currency.
For instance: mesquite wood is beautiful, durable, hard as rock, and can be used to fashion many things. But it makes no sense to peg the values (and the hourly labor) of a nation of people on mesquite wood. Or on any commodity; not even gold or diamonds; because there will always be 'cornerers' of the markets in those commodities.
I chose mesquite wood, something arbitrary; could have chosen smooth sea-glass for my illustration. But with that arbitrary standard of monetary ethics/values in mind, let's return to what I just discussed above and see how moral corruption/greed has created the most powerful 'money'-making combination in America today. This combination parades about in franchised banks on every street in every American town, and in spades with a thousand credit card companies and products.
This catalyst of deep corruption leading to impossible debt is nothing more than many years of accumulated work by the banking industry using their secret combination only because the United States Congress has made it "legal" and enables it on every hand. The secret combination, once more, is this: the combination of a bank charter, and having your bank tellers type numbers into your bank computer system.
This unethical, fraudulent combination can "manufacture" money that is not gold or silver or bronze or even mesquite wood. Nothing backing it but your promise to pay on a signed bank note; your promise to be at work paying off that debt for "x" years! You are essentially a slave to the bank, because you were first a slave to your desire for that purchase (whatever it was) that initiated the bank loan.
But here's what I want you to see: the bank's ability to type those numbers and call it money is much more immoral than your lust for the purchase that makes you go seek the loan! Those who speak so badly of Americans living in such debt don't speak equally disparagingly of the banks who MANUFACTURE that debt out of thin air!
Make no mistake, the banking industry and the Federal Reserve are as immoral and corrupt as the Taliban. But they WOULD NOT EXIST TOMORROW, IF CONGRESS WAS MORAL AND ETHICAL. Please note the common denominator of corruption that characterises the whole parasite sector:
- government employees at federal, state, county, city, school district levels
- the income tax industry public and private
- the legal and accounting industries
- the banking, 'credit', and mortgage industries
- the 'tax exempt' religious and secular leeches (including most churches)...
They produce absolutely NOTHING of intrinsic value. This is what they have in common with politicians, and this is why these areas of endeavor tend to attract people who are lazy, greedy, dishonest, or a combination of all three. Sorry if you work for a bank or a church; if the shoe fits...
Today, the USD is in peril not because of any structural deficiency in the American people to out-produce any other nation on earth; we can still do that. It is in peril because we have been adept at also out-consuming every other population on earth, and we have allowed corrupt Congresses and the banking industry to rape us from both ends for over a century. We have been profligate as well as stupid.
But we can change. And we can FORCE Congress to change. That's why I push so hard on the America Again! project; because it is the first national proposal to divide and conquer our domestic enemy; it is the ffirst time in our history that We the People will actually begin to ENFORCE the limitations of the US Constitution on thise who are sworn to obey it but have been violating it for five generations and more.
Start throwing a few congressmen and senators in the State Pen for their crimes committed, and you will never see a political entity get religion so quickly!!
The insidious evil of modern banking, even above all its other evils, is that a debt-based system (fractional-reserve magic and debt-denominated funny-money) depends on an ever-increasing spiral of debt because that is all the bank's "money" really is! The goal of every bank (and every business in America, really) becomes enticing you to consume, and go take on debt to do it.
Perfect example of Uncle Sam dealing this 'crack cocaine' to ignorant children? The vapid 'economic stimulus' charade of George II and the Congress: give the people a couple billion back in their pockets and tell them to go out and spend it!
If a critical mass of Americans become humbly repentant, I believe they will begin to see very important, very basic things about ethics and economics once more, as the common man once did in this republic. At that time (by the grace of God and in no other way) the American people will begin to bust the criminals in the US Congress, and in less than one year's time the Federal Reserve and fractional-reserve counterfeiting operations can be illegal as they should be. Congress could institute lawful, ethical, sound currency in an amazingly short period of time. It's just that if they try to do so, you will see more super-wealthy individuals go broke overnight than has ever occurred in history.
You will see more huge office buildings, estates, yachts, jets, etc go belly-up than you ever imagined could happen. What then? What will all these forlorn, formerly insanely-wealthy people do for a living?
Maybe they'll go cut mesquite wood; I don't care. If you're a productive American, neither should you.
www.america-again.blogspot.com
sounds like you have seen the power of 'money creation' in moving the economic energies of a community... and you wonder if we 'the people' can weild that power instead of the 'corporations' who misuse it..
I think that instead of trying to determine who controls this power that comes from 'money creation' a far more sustainable economy results when 'money creation' itself is stopped altogether. by creating money artificially one can inject a lot of economic action into a system, (wether done by for-profit banks, or by co-operative banks), but this injection of energy is 'fake' and must result in, at some point or another, a returning to the ground. (I hope I am not being too vague!)
anyway, let's keep the discussion going.
Peace
So I agree in a more perfect world, we should not try and control or regulate the economy. I am trying to suggest a way to reach all those out there who need to wake up in a hurry. The best way I see it is to entice them by offering something that will help them in their own economic back yard. When we have 90 per cent of the nation starting to save that is the goal, asset development for the immediate future along with education of what money is.
Thanks for the feedback.