The Significance of Publicly Created Money
Comments on Early Day Motion 323 by an American Financial Expert

NB Stephen Zarlenga will be in the UK May 4th-11th. These are the dates, so far - others may be announced nearer the time: i) Tuesday May 4th - With MPs @ 2.30pm in House of Commons ii) Wednesday May 5th- Global Table 11am-2pm, Friends House, Euston iii) Thursday May 6th FSC - 6-9pm in House of Lords Committee Room 3 - entrance via Black Rod

Stephen Zarlenga is the Director of the American Monetary Institute in Valatie, New York - www.monetary.org. On December 4, 2003 he addressed senior advisors at the US Treasury, and in May 2004 he will visit London and the UK.
As a member of the New York Futures Exchange he has ample experience in the real world of finance, but has also published some 20 books on money, banking and politics.
This includes The Lost Science of Money of over 700 pages which also covers the history of power struggles over money that is privately and publicly created and controlled.
In his address to the US Treasury, he made the following points:
1. General

a. The definition of money needs to distinguish between cash and coin as ‘government money’ and credit as ‘bank money’ b. Publicly created money has a superior historical record c. The breakdowns of law and money need to go together because the power to create money is a legal privilege

2. History of the UK and the US

a. The Bank of England usurped England’s money power from the Crown in 1694 b. In the American experience, the battle for monetary dominance has been miscast as irresponsible inflation money c. The cause of the American Revolution was the prohibition of issuing colonial legal tender by England’s Lords of Trade and Plantations while the ‘continental currency’ was the lifeblood of the revolution

3. The US

a. Private banking started with the first Bank of the U.S. b. The second Bank of the U.S. operated illegally and was liquidated c. The Government acted responsibly and issued US Treasury notes d. For every Greenback created by Congress, the banking system created $1.49 in bank notes e. The lesson of the Greenbacks is that not only in times of crisis, the State has the power to do what is financially necessary: i. No begging or borrowing from the wealthy ii. No adding to the national debt iii. No taxation of the middle class iv. No curtailing of public service programmes

4. US and UK Now

a. The Nation’s sovereign money power can be used to finance what is beneficial for the Nation: health and education and the infrastructure for transport and communication.

 

ABOUT STEPHEN ZARLENGA -footnote by Alistair McConnachie
Zarlenga draws on 35 years of personal experience in the world of finance, securities, insurance, mutual funds and real estate, to promote his message. He defines "the Money System" as the mechanisms and institutions by which a society's money is created, introduced into circulation and kept reasonably stable. He believes that the key to building a just money system - that promotes the general welfare instead of private interests - is to place it under public control rather than private control. He argues that if money is correctly understood as an abstract social power embedded in law, then a society has a better chance that its money system will be within government, just as the law courts at present. The money system should be organised as a fourth branch of government, he argues, on a par with the executive, judicial and legislative branches. The basis, and Achilles' heel, of the present economic system is the private control of the nation's monetary system, and its consequent misdirection, he states. He began focused research on the money problem in 1991 and in 1996, he helped establish the American Monetary Institute to further the research. The expanded English version of his 724-page work, The Lost Science of Money, was released in 2002, and establishes the author as a leading voice in the field of monetary history, theory and reform.
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Alistair McConnachie is Editor and Publisher of 4-page monthly journal PROSPERITY: Freedom from Debt Slavery, which is dedicated to promoting the policy of publicly-created, debt-free money.
A subscription is £15 payable to PROSPERITY at 268 Bath Street, Glasgow, G2 4JR

 

Notes by Peter Challen: UK visit of Stephen Zarlenga, Director of the American Monetary Institute - May 2004 - Visit and meetings were arranged by CCMJ, FSC, Henry George Foundation, and Monday Club - through the efforts of Austin Mitchell MP, Sabine McNeill, Donald Martin, Peter Gibb, Lord Sudeley and Peter Challen

Below are the main points that are woven into Stephen's book' The Lost Science of Money - the Mythology of Money - the story of Power'. They were applied in the six UK addresses of his whirlwind visit as he focussed in turn on
- their relevance for publicly created money as an issue for members of parliament
- their effect on the variety of issues faced at the Global Table
- usury as a factor eroding justice to be considered by the Monday Club
- their importance for the deliberations of the Forum for Stable Currencies
- their significance in bringing coherence to the land/money nexus before Georgists and Monetary Reformers in London and Edinburgh.

The Main points.
1. The concept of money is an abstract social power entrenched in law - a legal power or essence. Aristotle's NOMISMA
2. Money is not wealth. 'The most hated sort of wealth getting and with the greatest reason, is usury, which makes money out of money itself and not from the natural object of it.' Aristtole
He especially asked us to consider the case for removing all interest from the money creation process itself. This means carrying Archbishop of Canterbury William Temples 1942 initiative to fruition. {I will send the quote from Temple if asked.}
3. An intense social battle has been ongoing over the centuries between those who would privately control the society's money system and those who would have it properly constituted within government.
4. The monetary power is as important and powerful as the judicial, executive and legal arms of good governance and ultimately needs to considered as a fourth arm of governance.
5. An examination of history shows that publicly created money has generally functioned better than privately controlled systems. The Nomisma system can be traced back for 3000 years.
6. Historical cases of the worst inflation have been inaccurately reported in a way that blames governments; thus creating a mythology which it is hard to unravel.
7. Every society needs to examine (and realize) Archbishop William Temple's initiative.
8. Publicly created money tends towards the creation, maintenance and repair of social infrastructure. This is not inflationary, since the projects generally 'give' back' far more value than they cost.
9. Privately created money (fiat) tends towards quick speculative profits, often of little creative value.

These outcomes of Zarlenga's magnificent book triggered much reconsideration by all the groups addressed and within which lively discussions were evoked. I would welcome any reflections of the significance to readers of this report of any part of the visit in which they partook. We have an opportunity to rally our work together, strengthened by this scholarly work.

The full Papers on which all this sensitive application to the varied groups can be found on Zarlenga's website ...........
1. Stephen's talk last December to the US Treasury on resolving the stateâs fiscal crisis has been so positive, is to be found on www.monetary.org/treasurytalk
2. His studies on usury... www.monetary.org/Usury
3. The insights of Henry George on money .... www.monetary.org/Georgist
( this may not be available for a week or so )~~~~~~~~~~~~~~~~

More on the book and the author.....The Lost Science of Money:
• Traces the money power through three and a half millennia from barter to the Euro.
• Draws fascinating, previously lost monetary principles from ancient Greece and Rome, from the experience of the Moslems, Venice, the Templars, the Jews, the Bank of Amsterdam and Bank of England, and the Federal Reserve System.* Shows that the question of usury is far from settled, and that monetary reform is more a matter of morality and law than of economics.
• Demonstrates that a good money system must be based in law, not in commodities.
• Defines the essential elements needed to remove structural injustice from our money system.

The author is more than familiar with both the practical and theoretical sides of our market economy, as can be seen below. Yet he calls into question and challenges the basis, and Achilles' heel, of American Capitalism: the private control and resulting misdirection of the nation's monetary system.

ABOUT THE AUTHOR
Stephen Zarlenga draws on 35 years of experience in the world of finance, securities, insurance, mutual funds, real estate, and futures trading. He has published 20 books on money, banking, politics and philosophy (including The Anglo American Establishment, by Prof. Carrol Quigley). While in his mid-20s he incorporated the Athenian branch of an English life insurance company, earlier opening several European markets for the parent firm, IDS. A few years later he built the U.S. distribution network of the then leading American mutual fund concentrating in gold shares. As a member of the New York Futures Exchange (a subsidiary of the New York Stock Exchange) he specialized in trading the complex CRB futures index for several years.

Stephen Zarlenga holds a degree in Psychology from the University of Chicago (and has done postgraduate work at NYU). where he was in the final graduating class under the revered Hutchins' curriculum which focused on critical reading and thought. This training, combined with his work experience, and years of research, enabled him to re-formulate the Lost Science of Money. The author began focused research on the money problem in 1991, eventually drawing on over 800 monetary source books and materials to formulate this thesis. In 1996, he helped establish the American Monetary Institute to further the research. In 1999, Conzett Verlag of Zurich, Switzerland translated and published the work in German. This expanded English version released in 2002, establishes the author as a leading voice in the field of monetary history, theory and reform.
ISBN: 1-930748-03-5