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THIS IS OUR SILVER BULLET PLAN for using the natural wealth of our nation wisely to solve our current money problems. This is the culmination and summary of Plans A through D
silver bullet supplement / Be sure to see the supplement -- it is also added below -- scroll down.
The natural wealth of this country is embodied in (A) our land, (B) our knowledge and (C) the various skills of our people. With proper management, we can produce whatever food and material goods we need many times over. We suggest it is wise for our country to have complete confidence in (A), (B) and (C) and follow the plan below.
THE ECONOMIC PLAN HAS 10 ITEMS (the previous 14-points were combined into 10)
Home Mortgages
(1) Pass laws that will prohibit mortgage-issuing banks from selling off the loans they provide for mortgages. That will insure that the lenders want the loans to succeed and be paid off. It will make sure that the lenders are prudent. That should stabilize the future housing markets by removing the temptation to “bundle” mortgages into strange financial instruments. The lenders will have to learn to live on the interest from their loans. That should not be difficult -- it was always the way things were done in the past. Had that been a law 10 years ago -- our banking and money collapse would probably never have happened -- the old-fashioned system of house mortgages would have essentially guaranteed good loans by a vigilant local-bank system of lenders.
Lending banks must have some skin in the game -- that will tend to keep them prudent and honest. The formation of Freddie Mac and Fannie Mae (they were formed to buy loans from banks) was, in our opinion, probably the biggest domestic management blunder of the Federal Government over the last 50 years. We believe that fact led directly to the current (early 2009) economic meltdown. See “Downside Leverage” at B-13.
Banking and Lending
(2) Congress should encourage the establishment of grassroot, local, money-creating banks by common people and groups of people -- such as community organizations, Credit Unions, homeowner associations, charities and such. That would practically guarantee a stable, competitive banking market. As we read the Constitution (see A & B below), it gives that right to the people. (A) From Section 10 - Powers prohibited of States --”No State shall ... coin Money; (or) emit Bills of Credit ... (B) From “Amendment 10 - Powers of the States and People. Only those money-creating banks would be chartered to create money by making loans (now, all banks can create money at no cost to the bank by making loans) The money-creating banks would be 1/6th owned and operated by cash-investors who would get the first profits generated by the bank -- up to 6% of their investment -- and 5/6 owned by a non-profit agency chartered to operate in the interest of the general public who would get 5/6th of the remaining profits (after the cash investors get their 6% up-front). The profits that go the general public would be spent on projects that would benefit the general public.
3) Change the Federal Reserve to “manager / bankers” who will follow new Constitutionally-oriented rules which will be set down by Congress. Take away their money creating powers which were “farmed out” to the FED in 1913.
(4) Follow the Constitution and return the MONEY CREATING power to Congress. That will mean Congress can print whatever money our country needs for wealth producing assets.
Budgets and Spending
(5) Spend government money in the future only on things that will create wealth and provide a 20% annual return on the expenditure / assets. Most good companies consider a 20% return on their investments very conservative. There is no reason our country can’t get that level of returns.
(6) Realize that (A) good health care, (B) good education (including libraries) and (C) adequate housing are always worthwhile wealth producers. Healthy, educated, secure people are more efficient wealth producers. The government should spend whatever is needed in those three areas.
(7) The Government should never borrow money. It has the Constitutional and Sovereign power to print whatever money it needs (as do all sovereign nations). To borrow money is almost insane if you can create it. See <http://www.primeronmoney.com/lincolnspolicy.html> for Abraham Lincoln’s monetary policy. The policy is also at Section D -- page 7 and 8 of the book.
(7.1) Ignore those that will say that printing money is inflationary. That is nonsense. If the printed money is spent on wealth-producing assets it will be neither inflationary or deflationary. On the world money markets our dollars should seek their natural level of value. If we are efficient and wealthy -- our dollars will be worth much. If we are laggards, our money will be worth little. We should not be afraid of international wealth-producing competition. Challenge the rest of the world to a wealth-creating competition. Pay off all debts immediately with our newly printed money and never go into debt as a nation again. That simple act will save us about $400 Billion dollars / year in interest charges.
(7.2) The government should issue bonds that can only be purchased by American citizens in order to (a) encourage saving by the public and (b) give the public a safe place to invest their savings. This will essentially be a subsidy to savers. Under present rules, existing bonds can’t be sold only to American citizens -- thus the bond interest rate can’t be adjusted as needed to benefit the American economy without allowing foreign countries to take advantage of the benefits aimed at our citizens.
8) Embark on a bold program of wealth generation by investing in basic water-oriented infrastructure to (a) turn seawater into fresh water and (b) build a nationwide system of pipes and pumps so we can deliver the water efficiently wherever it is needed for irrigation, personal and industrial use. At that point, we will probably be able to feed half the world and turn food into various forms of wealth through trade with other countries. Water is our most undervalued asset. Mix water with seeds dirt and you can get (a) delicious food, (b) valuable building material, (c) versatle material for clothing and (d) magical trees that efficiently convert Carbon Dioxide to Oxygen, thus helping avert the threat of global warming.
On 2/4/09, Jim Tankersley of the L.A. Times reported from Washington — “California’s farms and vineyards could vanish by the end of the century, and its major cities could be in jeopardy, if Americans do not act to slow the advance of global warming. Steven Chu, U.S. energy secretary warns, ‘We’re looking at a scenario where there’s no more agriculture in California,’ “
<< http://www.latimes.com/news/local/la-me-warming4-2009feb04,0,7454963.story >>
Education
(9) Start an educational program that will lead to the general public’s understanding of how our money system works. A well informed public is our best insurance for a sound economic system. This program can probably best be started on the internet with a dedicated website.
(10) Keep the public informed on current and planned programs aimed at increasing the national wealth by posting such information on the internet. The information should, at a minimum, state (a) the name of each program, (b) the description of each program (c) The name of the asset(s) that will be created by each program, (d) how much money will be invested in each program, (e) the expected rate of financial return over the life of each program, (f) the depreciation schedule for the program and (g) the name of the person in charge of the program. On that website there should be (1) a way for the viewer to send immediate short comments and (2) an email address for sending long comments on each program.
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See plans A to D on pages F-2 to F-11 of our book for background and supporting arguments that led to this final 2-page, 10-item plan.
Supplemental material to the "silver bullet" plan
This plan is necessary for the following reasons A to D
A) The present system is in violation of the Constitution because it does not provide for Congress having the power to "coin money and regulate the value thereof" as specified at Article 1 / Section 8.
B) The present regulation of the money supply by the Federal Reserve System, a privately owned entity, costs the Federal Government and the taxpayers about 400 billion dollars interest every year. Saving that money will be an enormous stimulus to the economy.
C) The present system almost always results in an unbalanced federal budget.
D) The existing Federal Reserve System has no checks and balances.
The Fed reports to Congress, but Congress does not have any practical power to efficiently control the Federal Reserve System.
PRIMARY GOALS OF THE PLAN:
A) The proposed plan will balance the Federal Budget in all years after its implementation.
B) The proposed plan will provide for the checks and balances implied by the Constitution by putting all monetary functions in the hands of Congress or the Executive Branch of government, both of which are automatically subject to the checks and balances inherent in the Constitution.
C) The plan will prevent Investment bankers from getting their hands on regular home mortgages and turning them into strange financial instruments that nobody understands and which may yet destroy our economic system.
D) Our government will never borrow money again -- thus saving $400 Billion / year in interest payments at a minimum.
E) Local governments will open State-chartered community banks that will focus on 4% home mortgages. Those mortgages will generate a gross profit (don't shrink from that word) of 40% on the invested capital and will, by efficient operation of the banks, bring more than 30% profit to the bottom line that can be used in programs that will benefit all the people. Use the "contact" link above to send us your ideas. If you agree with any or all of the above plan -- let us know. If you agree with everything, allow us to list you as an endorser. If you have a plan of your own -- send it to us -- perhaps we can publicize it.
Please send us comments, suggestions and criticism on the program laid out above. Read all the articles, reports and such on this website with a critical mind: don’t believe everything. Remember the following words of wisdom: “Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense.” / Buddha
Marty Carbone / Telephone: 760-603-1910 / martycarbone@yahoo.com
http://www.primeronmoney.com