By Sue Peters

Sue Peters has been a long-time resident of Manhattan. She worked for 37 years in computer technology, designing data systems. Her longest job was as an associate VP for a Wall St. bank, where she learned about the monetary system by designing accounting systems.

Sue is a member of the American Monetary Institute (AMI). In 2002, the founder of AMI, Stephen Zarlenga, published an influential book, The Lost Science of Money, detailing the history of money in our world. In 2011, Representative Dennis Kucinich, working with the AMI, introduced a monetary reform act into congressional committee, the NEED ACT, HR 2990.

You probably have read or heard about CBDC – Central Bank Digital Currency. But what is it and is it good for our nation? To understand CBDC, we need to examine our U.S. central bank – the Federal Reserve. The Federal Reserve is composed of 12 regional Federal Reserve Banks [Fed Banks]. Here in New York City, we have the NY Fed Bank, the most powerful.

You may be incredulous when I say: each Fed Bank is a private corporation. They are not owned by our national government. So who owns the shares in these corporations? Answer: all the shares of a Fed Bank are owned by the private commercial banks that are members of that Fed Bank. For example, in 2006, the NY Fed’s shares were 50% owned by JPMorgan Chase bank, and 23% by Citibank. Those figures are from a 2006 report from the NY Fed itself. We citizens are not allowed to own any shares.

But, you say, our money is created by our government in Washington! That is not true, except for the coins which our U.S. Treasury still mints and spends into circulation.

So who creates our money today? Buckle up. In our money system, there are two types of money (and this is important to understand since it is fundamental to making a judgment about CBDCs).

According to the 1913 Federal Reserve Law, the 12 private Fed Banks have the power to create “reserve money”. I want some, you say! No, you cannot own reserve money. It can only be owned by member commercial banks, who use it to settle nightly accounts with each other.

So, today, where does citizens’ money – checking account money – come from? Answer: the money in your bank account was created by a commercial bank. “Hogwash! Crazy!” you exclaim. Sad but true. We Americans have been deceived about money.

The first commercial banks were chartered by state legislatures, starting in the first decade of our new country. The charter gave the new corporation the right to create a deposit in its customer’s account, when the customer signed a loan agreement with the bank. The deposit equaled the loan amount, i.e. ‘loan principal’. Of course, the borrower must pay off not only the loan amount, but the interest charged by the bank. And, if the borrower failed to pay off the loan, the loan collateral was taken over by the bank!

When I think about this legal delegation of power to private corporations, I call it immoral. Especially since our U.S. Constitution gives the power to create U.S. money to Congress ONLY. See Article I, Section 8, Clause 5: “The Congress shall have power…To coin Money” Back when the Constitution was written, a lower-case verb ‘to coin’ meant to create all money, whether paper currency or coin, spending it into the economy for the general welfare.).

All the private commercial banks, from the inception of our country to the present, have been given these incredible powers. This is true of your commercial bank too. Can you now understand why our country is in trouble? This rotten system causes the following. Think about this:

  • Why does Congress allow the banks to create our money for profit?
  • Why is our national government borrowing money (currently U.S. national debt is $32 trillion!) instead of constitutionally creating it as an asset to our nation, not debt?
  • Why the extreme inequality of both income and wealth distribution among our citizens?
  • Why are 50 million Americans living in poverty?

CONCLUSION: Knowing now the nature of this corrupt private system, intentionally hidden away from public understanding, please question all the hype surrounding the introduction of a CBDC. Some citizens have warned: (1) physical cash will be removed and therefore our right to transaction privacy. (2) The Fed will know all your digital transactions and may restrict what you spend your money on.

But, you say, it is the government that will be wielding this authority, not the Fed. Understand that government has been controlled by the bankers for a long time. The bankers are the largest lobby in Congress. The bankers determine if our economy has enough money, too much money (inflation), or too little money (deflation). In 2020, Fed governor Ben Bernanke apologized to the American people for the Federal Reserve System causing the 1930’s Great Depression! He said: “We did it. We are very sorry.”

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