Bankers legally have power to create money out of thin air & then loan that money back to us & charge interest for the use of it

An update from
Paul Grignon


Note: If the weather looks unfavorable as of Monday evening, January 2nd, I will email you to cancel the meeting. I will also telephone you if I have your number and know you are planning to attend. Please advise me if you are planning to attend and also give me your phone number in case it is needed. Call me at (319) 753-1148 or click reply and email me that you plan to attend, be sure to include your name and phone number. Thanks.

VOTE YOUR CHOICE: Let's find out what day of the week is best for you for our Monetary meetings, please take a moment and vote, just click Reply and then indicate the day and time you would prefer for our monthly meetings. Please click reply right now and vote, then continue reading this newsletter. Thank you.

At this meeting we will show a short video which explains how the Federal Reserve Act of 1913 was written in strict secrecy and why that secrecy was necessary to get Congress to pass it. If, as I hope and expect, we have a number of new people at this meeting, we will also rerun the video "Money as Debt." Then we will have a question and answer session and also discuss ways to make more people aware of the serious need to reform our monetary system. Please bring a friend with you. Explain to your friend that every year hundreds of billions of new U. S. dollars are created and put into circulation (looks like over $900 billion this year) and that there are two ways this can be done:

1. Have the U. S. government create the money and spend it into circulation as a dividend for us all. or

2. Have the government give the money to the Federal Reserve and its fractional reserve banking system, free of charge, and then let them loan our own money back to us with an interest charge attached, resulting in an increase of our total interest-bearing debt.


Then explain to your friend that, In order to use option #1, we must first eliminate fractional reserve banking, otherwise money spent into circulation would multiple up to 20 times under the fractional reserve system. Invite your friend to come to our meeting and learn more about this issue. Based on the first eleven months, the Federal Reserve and the fractional reserve banking system will create $913 billion this year. If the U.S. Government used option #1, the citizens of this country would have received a $913 billion tax-free and debt-free dividend. Instead, Congress continues to use option #2, and, as a result, in order to create the new $913 billion our country will be $913 billion plus interest deeper in debt. Here's what the late Congressman and Chairman of the House Banking Committee, Wright Patman (D-TX), had to say about this process:

"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." Congressman Wright Patman.

An exchange between Congressman Wright Patman and Federal Reserve Chairman Eccles on 9/30/41:

PATMAN: "How did you get the money to buy two billion dollars worth of government securities in 1933?"

ECCLES: "We created it."

PATMAN: "Out of what?"

ECCLES: "Out of the right to issue money."

PATMAN: "And there is nothing behind it, is there, except our government's own credit?"

ECCLES: "That is what our money system is. If there were no debts, there wouldn't be any money."

"This is the most incredible part of the Federal Reserve operation and one which is difficult for people to understand. How can any American citizen grasp the concept that there are people in this country who have the power to make an entry in a ledger that the government of the United States owes them two billion dollars, and to then collect the interest and the principal on this "loan." Congressman Wright Patman.

Ask yourself why bankers, alone among all our citizens, should legally have the power to create money "out of thin air" and then loan that money back to us and charge interest for the use of it. If you read and understood what Congress Patman said then you know why we MUST get rid of the existing fractional reserve banking system - that system is forcing us deeper and deeper into debt at a faster and faster pace. We must change this debt-based system before it collapses of its own weight. As I have said before, this system is a mathematical impossibility, it requires us to always try to pay back more money than there is because when banks loan money into existence, only the principal is created, but we are supposed to pay back the principal plus interest. Here is what the late Congressman Jerry Voorhis (D-CA) had to say about the present monetary system:

"The Constitution of the United States says, "Congress shall have power to coin money and regulate the value thereof." Congress does no such thing, which is the heart of our trouble. Private banks coin our money and regulate its value. In doing so they take from the government and the people of the United States a large chunk of their sovereighty, a large chunk of the taxing power, and the key to a prosperous economy without inflation." Congressman Jerry Voorhis.

"A nation's money supply is created by either government's spending new money into existence or a bank's loaning it into existence. The former approach allows a government to pay for public services beyond the amount of its tax revenues. The latter generates large profits for private bankers. Though it's not generally recognized by the public, virtually all money is now loaned into existence by private banks, which means a nation's money supply and the stability of its money system depend on continuously expanding debt to create enough money to repay the old debts and avoid bankruptcy - a primary reason why capitalist economies are prone to collapse if they do not grow exponentially. Placing a 100% Reserve on Demand Deposits in the banking system and returning the function of creating national currencies to government would largely eliminate the Federal Government's need to borrow and would reduce the power of the Banking System." David Korten, Author of When Corporations Rule the World.

Join us in support of the American Monetary Act which will (1) Nationalize the Federal Reserve Banks, (2) Eliminate fractional reserve banking, (3) Return the power to create, issue and regulate the value of money to the U. S. Government where it constitutionally belongs (Article I, Section 8, Clause 5), and (4) Rebuild the public infrastructure with interest free loans to state and local governments. By passing this Act we would have money working FOR us. Under the present system, money is working AGAINST us in the form of ever increasing interest-bearing debt. The American Monetary Act will reclaim control of our money and let us regain control of our lives. A far better world IS possible, all we have to do is claim it. Please call me now at (319) 753-1148 and let me know if you will be at our Jan. 3 meeting.

The "Money as Debt" video we showed at our last meeting is now available on the internet, please click on the link below and be patient, it may take a few seconds for the video to appear, then click on the right facing arrow to start the video.


Published on Saturday, December 24, 2005 by CommonDreams.org

"Peace on Earth" Means "No More War"

by John Dear (This is a small portion of the article, click on the following link to read it all).


This weekend, as tens of millions of Christians across the country celebrate the birth of the Prince of Peace, the U.S. wages war in Iraq, Afghanistan, Columbia and elsewhere, crushes the hungry, homeless, elderly, imprisoned and refugee, and maintains the world's ultimate terrorist threat - its nuclear arsenal. Like Herod, Pilate and their soldiers, we have rejected the angels' call for "peace on earth." When Bush, Cheney, Rumsfeld and their warmaking supporters celebrate Christmas, they mock Christ and his steadfast nonviolence, and carry on the massacre of the innocents. If the angels are correct, then Christmas requires us to welcome God's gift of peace on earth. In such a time, that means we have to work for an end to war. Christmas calls us to become like Christ - people of active, creative, steadfast nonviolence who give our lives in resistance to empire and war.

Christmas demonstrates that God sides with the poor, becomes one with the poor, and walks among the poor. God does not side with the rulers, the rich or the powerful, but with the homeless, the hungry and the refugees. Christmas puts poverty front and center and demands that we work to abolish poverty itself so that every human being has food, clothing, housing, healthcare, education, employment and a lifetime of peace.

Since the birth of Christ means that every human life is beloved by God, that all human beings are God's children, we have to treat every human being on the planet as our very own sister and brother which means we must oppose war and work for the abolition of war itself. In particular, we denounce Bush's war on Iraq, demand that the troops return home, and call for reparations and nonviolent solutions to the horrors we have brought upon the people of the Middle East.

Finally, Christmas invites us to be human in an inhuman time. The scandal of the story is that God wants to become human and show us how to be human. We, on the other hand, want to play God, to be powerful, in charge, in control, to dominate the world. Perhaps the best way to celebrate Christmas and welcome the beautiful gift of peace on earth is simply to be human, despite the callous inhumanity around us, and to trust that our modest, vulnerable humanity - our nonviolence, compassion and love - like the humanity of the child in the crib, will one day bear good fruit and sow the seeds of peace on earth. THE "PROJECT FOR A NEW AMERICAN CENTURY" (PNAC)SPELLS OUT BUSH ADMINISTRATION MIDDLE-EAST GOALS. The way I see it, the War in Iraq is not about democracy or freedom, it is about control of Mideast oil and about permanent military bases in Iraq. It will not bring peace, it will bring unending war. There is no exit plan because the Bush administration does not intend to leave the Middle East. It continues to follow the overall plan prepared by the Project for a New American Century (PNAC). In September, 2000, the PNAC released a major policy study "Rebuilding America's Defenses". It stated a policy of U. S. world dominance, both economically and militarily. It also stated that no other nation will be allowed to challenge U. S. supremacy. On Iraq, PNAC stated: The United States has sought for decades to play a more permanent role in the Persian Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification for war, the need for a "large military footprint" in the Gulf transcends the issue of Saddam Hussein. The strategy detailed in the PNAC was supported by, among others, Donald Rumsfeld, Dick Cheney, James Woolsey, Paul Wolfowitz, Richard Perle, James Bolton, Jeb Bush, Zalmay Khalilzad and William Bennet. Before George W. Bush was even elected, these men signed on to this policy: "The challenge of this coming century is to preserve and enhance this "American Peace," and, "in order to preserve this "peace," the U.S. must be able to "fight and decisively win multiple, simultaneous major-theatre wars." (Italics in quotes are mine for emphasis). The PNAC is a blueprint for a U. S. Empire. In the eyes of International Law, the Iraq war is an illegitimate war of aggression, but that does not concern these policy makers. After the November, 2000 election, many of these men became decision makers in the administration of George W. Bush, and, in 2002, the official National Security Strategy of the United States (in accordance with the PNAC stated policy) asserted the right to use military force, anywhere in the world, at any time it chooses, against any country it believes to be, or may, at some future time become, a threat to American interests. All at the discretion of the President. No country has ever made such a broad claim to global domination. Their plans for "multiple" wars went awry because of the Iraqi resistance to our occupation, but this does not mean they have given up. Syria or Iran may well be next if and when the Iraq situation is stabilized. Click on the link below to see the entire PNAC plan, then click on "Defense & National Security," then on "Rebuilding America's Defenses." This policy statement is 78 pages long and it advocates an American Empire, which is, at least in my opinion, completely un-American. We need to take back our country in the next election and stop the current course of action. http://www.newamericancentury.org/ THE CONTINUING COST OF "STAYING THE COURSE" Here are the latest casualty reports: American Deaths since the war began: 2,174 American Wounded since the war began: 16,155 Iraqi civilian deaths since war began: 27,592 to 31,115 (no accurate figures available). Some estimates of civilian deaths in Iraq go as high as 100,000. Estimated Iraqi wounded since war began: no estimate available. American Deaths in Afghanistan: 246 Total American Deaths Iraq and Afghanistan: 2,420 Source of above: http://www.antiwar.com/casualties/

BUSH IS TOTALITARIAN - THE OAKLAND TRIBUNE... Bush is totalitarian - Big Brother is watching - The Oakland Tribune - Dec. 23, 2005. "We are fighting a war with no end to create a peace with no defined victory. We occupy a foreign land that doesn't want us, while at home our civil liberties are discounted. We are told that it's better not to know what our government is doing in our name, for security purposes. Meanwhile, our government is becoming omnipresent, spying on us whenever it deems it necessary. War is Peace. Freedom is slavery. Ignorance is strength. George Orwell was right after all. In 1949, Orwell penned "1984," a dark, futuristic satire in which the totalitarian government used indoctrination, propaganda and fear to enforce order and conformity. In America today, Big Brother is watching. He's watching because President Bush told him to. Shortly after 9/11, Bush secretly authorized warrantless wiretaps on U.S. citizens making or receiving international calls and e-mails. When it comes to fighting terror, Bush is totalitarian -- remember, "you're either with us or against us." "Trust me to get it right", he says. Debate on the law is not only not needed, it's evil." There is no doubt in my mind that the Bush administration's invasion of Iraq was unjust, illegal, immoral, unnecessary and was based on deception and outright lies. Under Nuremberg rules this Iraq invasion is a war of aggression - a war crime by definition. The Iraq war is also illegal under the U.N. charter. The deaths of 2,174 American soldiers and over 30,000 Iraqi men, women and children is also a war crime, as is the torture of prisoners. The use of depleted uranium ammunition and the use of white phosphorus ammunition against people in Fallujah is another war crime. Bush claims that his war crimes are justified because thay are committed in the name of "freedom and democracy." The whole world rejects this excuse. Sooner or later, even Bush's remaining supporters will turn away in shame from the dishonor Bush has brought to America. Perhaps in November we will elect a Congress which will pursue the impeachment of Bush and Cheney for these crimes.


(The following is just part of what Rep. Murtha had to say - the web site of the full article follows these excerpts) Armed with graphs, bar charts, and intimate knowledge of what is actually happening on the ground in Iraq, the former U.S. Marine, Represenative John Murtha, shredded Bush's claims, blazing a path for his fellow Democrats, which most of them continue to avoid. Venturing on ground normally shunned by his fellow Democrats, Murtha derided Bush's description of resistance in Iraq as terrorism. He insisted it is an insurgency, empowered by the U.S. military presence and by U.S. tactics. Murtha stated: "Fallujah happened about the same time as Abu Ghraib -- we put 150,000 people out of their homes in Fallujah. If you remember in Jordan, the bomber said that the reason she became a bomber was because two of her relatives were killed in Fallujah. We lost the hearts and minds of the people." "Now let me tell you the major problem we have. You heard the president talk about terrorism. Every other word was "terrorism." Bin Laden said he attacked the United States because of the troops in Saudi Arabia. That's terrorism. Terrorism was in London. Terrorism was in Spain. Terrorism, obviously, was in the United States." "That's completely separate from what's going on in Iraq. Iraq is an insurgency. At one of the hearings early on, Secretary Rumsfeld denied there was an insurgency.....they wouldn't admit that they were having real problems over there. They kept being unrealistic, illusionary about what was going on in Iraq." "80 percent of the people, according to a British poll reported by the Washington Times, say they want the United States out; 77 percent of the people in Saudi Arabia, Jordan and Egypt say there's a better chance of democracy if the United States in not there because we're considered occupiers; 45 percent of the people in Iraq think that it's justified to kill Americans. They even had an official communique that says it's justified to attack Americans." "So in this country, when I made my initial proposal to redeploy the troops and make a diplomatic effort, the only way I think this will work -- I don't think you can continue to draw down the way they're talking about. They're going to withdraw. There's no question they're going to withdraw. I predict a big proportion of the troops will be out by next year." "But the problem is they're just as vulnerable. The biggest vulnerability we have in Iraq is the convoys. Every convoy is attacked. When I was in Anbar, at Haditha, every single convoy was attacked that goes there to bring the logistics and supplies that they need. That's the most vulnerable part of our deployment. And if you have half the troops there, you're going to still have to supply them, resupply them on the ground and they're going to be attacked." "When I said we can't win a military victory, it's because the Iraqis have turned against us. They throw a hand grenade or a rocket into American forces and the people run into the crowd and....nobody tells them where they are. The conclusion I've reached is there will be less terrorism, there will be less danger to the United States and it'll be less insurgency once we're out. I think the Iraqis themselves will turn against this very small group of Al Qaida." "Now, my plan says redeploy to the periphery -- and if there's a terrorist activity that affects our allies or affects the United States national security, we can then go back in. I'm not talking about going back in if there's a civil war, because we're in a civil war right now. We're caught in between a civil war right now." Click on the link below for the complete article. http://www.counterpunch.org/cockburn12092005.html Those were just a small part of Rep. Murtha's remarks. He is offering a reasonable way out of the mess we are in. Unfortunately, the Project for a New American Century wants us to have a strong military presence and control of the Mideast's oil permanently and the Bush administration is following that strategy, so, in my opinion, we will continue to lose lives in Iraq until we get rid of this administration, get rid of the PNAC's ideas, get rid of the Bush National Security policy of pre-emptive, preventive warfare, and return our country to what it should be and has been in the past - a beacon of democracy in the world. I just hope we don't have to wait three more years to do so.


A new book "Petrodollar Warfare" by William R. Clark (available in our Burlington Library) tells the whole story. I will attempt to summarize the secret deal and its possible results. To get the complete story I recommend reading that book.

Back in 1973, the big banks in New York and London offered a secret deal to Saudi Arabia and OPEC. The deal was that Saudi Arabia and the rest of OPEC would be allowed to quadruple the price of oil in return for two conditions. One, all oil purchases must be made with U.S. dollars. Two, any surplus dollars held by OPEC nations would be invested back in the United States. What was in this deal for OPEC? Obviously being able to quadruple the price of oil was very profitable to the OPEC nations and also very profitable to U.S. and British oil companies. What is less readily seen is that it would also be very profitable to the big banks because they would create the needed new U.S. dollars "out of thin air" and loan them into existence with an interest-charge attached. A sudden sharp increase in the world price of oil meant an equally dramatic increase in world demand for U.S. dollars to pay for the oil. The big banks would win, the OPEC nations would win, and the big oil companies would win. Who would lose? We consumers. We would not only pay more for gas and oil, we would be forced much deeper into interest-bearing debt as new dollars were created.

This deal was accepted and is still in effect. Oil importing nations must pay for oil with dollars. This means that these countries must acquire dollars - primarily by selling goods and services to the United States - which allows the U.S. to run huge trade deficits. The number one export of the United States is now the dollar itself. The U.S. buys oil by simply "creating the money" to do so. This explains why the U.S. banking system can create $600 to $800 billion or more new dollars, year after year, and we do not suffer serious inflation as a result. Why? Because a large portion of these new dollars are spent for oil, then OPEC re-invests the dollars back in the U.S. economy in the form of U.S. government bonds, the stock market, corporate bonds, or the purchase of other U.S. assets. These excess new dollars do not compete for consumer goods and services and thus do not cause inflation, but the more dollars our fractional reserve banking system creates, the deeper in debt we are. Our total debt is now over $38 trillion. Just the interest on that debt is over $2 trillion a year. World trade is now a game in which the U.S. produces debt-based dollars and the rest of the world produces things that dollars can buy.

Asian central banks also buy and hold hundreds of billions of U.S. treasury securities for one simple reason. To prevent their own currencies from appreciating versus the dollar. A weak dollar would hurt their exports to the U.S. by making their goods and services more expensive. In doing this these Asian banks also invest these newly created dollars back into the U.S. In a way this almost sounds like a good deal for the United States, and it is IF these dollars do not come back to the United States to compete for consumer goods and services. But, at some point, that WILL happen. For example, in 2004, the U.S. trade deficit was $665 billion which means the U.S. must borrow from other nations a minimum of $1.8 billion EVERY DAY to avoid a dollar collapse. This year's trade deficit will be over $800 billion. The Federal Reserve is now walking a tight-rope as it continues to raise interest rates in order to attract outside dollars while hoping that the higher interest rates will not throw the U.S. economy into recession.

On September 24, 2000. a new factor entered into this cozy deal for OPEC, the oil companies and the big banks. On that day, Saddam Hussein announced that Iraq would conduct all oil sales in Euros, not dollars. And Iran, Venezuela and Russia all have indicated they are considering doing the same thing. It is very likely that Saddam Hussein's action was another big reason for the invasion of Iraq - to send a strong message to oil producing countries not to abandon the dollar. And as soon as we occupied that nation, Iraq began again accepting only dollars for oil.

What would happen to the U.S. if the sales of oil were denominated in Euros instead of dollars? All Hell would break loose. Oil purchasing countries would no longer want dollars, they would want to acquire Euros instead to pay for oil. This would mean that a large portion of dollars now held around the world would return to the U.S. Inflation would run wild. The value of the dollar would probably drop by 40 to 50 percent. Foreign funds would be withdrawn from the U.S. stock and bond markets, and the U.S. would no longer be able to support a huge trade deficit. Central banks in Japan, China and elsewhere would also try to get rid of their dollar denominated investments before they dropped even futher in value. The recent economic collapse in Argentina would be repeated on a grand scale in the United States. This could be the "financial armageddon" that many, including myself, have predicted and expected.

Click on the links below for more on the Argentine economic collapse:




The need to change our monetary system is urgent. Hopefully, working together throughout the country, we can convince the Congress to replace the present debt-based system with the dividend system proposed by the American Monetary Act before such a financial catastrophe occurs.

The one "silver lining" of such a catastrophe would be that it would present a real "window of opportunity" to get Congress to pass the American Monetary Act and get rid of fractional reserve banking. With that change the United States could counter the disaster and put our county on the right track to a quick recovery. Remember what the news story in London said when President Lincoln first issued the Greenbacks by spending them into circulation: "If this mischievious financial policy shall become endurated down to a fixture, then that Government will furnish its own money without cost. It will pay off its debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains and the wealth of all countries will go to North America. - Editorial, The Times [London].

Lincoln also made the following statements:

"Money is the creature of law and the creation of the original issue of money should be maintained as the exclusive monopoly of national government." Abraham Lincoln.

"I have two great enemies, the southern army in front of me and the financial institutions in the rear. Of the two, the one in my rear is the greatest foe. The Government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers. Money will cease to be master and become the servant of humanity. Democracy will rise superior to the money power." - Abraham Lincoln.

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