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Book I

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Monetary Reform Act



The Two Step Plan to

National Economic Reform and Recovery


1. Directs the Treasury Department to issue U.S. Notes (like Lincoln’s Greenbacks; can also be in electronic deposit format) to pay off the National Debt. 


2. Increases the reserve ratio private banks are required to maintain from 10% to 100%, thereby terminating their ability to create money, while simultaneously absorbing the funds created to retire the National Debt.


These two relatively simple steps, which Congress has the power to enact, would extinguish the national debt, without inflation or deflation, and end the unjust practice of private banks creating money as loans (i.e., fractional reserve banking). Paying off the national debt would wipe out the $400+ billion annual interest payments and thereby balance the budget. The following Act would stabilize the economy and end the boom-bust economic cycles caused by fractional reserve banking. 



 Summary of the Monetary Reform Act  

This proposed law would require banks to increase their reserves on deposits from the current 10%, to 100%, over a one-year period. This would abolish fractional reserve banking (i.e., money creation by private banks) which depends upon fractional (i.e., partial) reserve lending. To provide the funds for this reserve increase, the U.S. Treasury Department would be authorized to issue new United States Notes (and/or U.S. Note accounts) sufficient in quantity to pay off the entire national debt (and replace all Federal Reserve Notes).


The funds required to pay off the national debt are always closely equivalent to the amount of money the banks have created by engaging in fractional lending because the Fed creates 10% of the money the government needs to finance deficit spending (and uses that newly created money to buy U.S. bonds on the open market), then the banks create the other 90% as loans. Thus the national debt closely tracks the combined total of U.S. Treasury debt held by the Fed (10%) and the amount of money created by private banks (90%).


Because this two-part action (increasing bank reserves to 100% and paying off the entire national debt) adds no net increase to the money supply (the two actions cancel each other in net effect on the money supply), it would cause neither inflation nor deflation, but would result in monetary stability and the end of the boom-bust pattern of U.S. economic activity caused by our current, inherently unstable system.


Thus our entire national debt would be extinguished – thereby dramatically reducing or entirely eliminating the U.S. budget deficit and the need for taxes to pay the $400+ billion interest per year on the national debt – and our economic system would be stabilized, while ending the terrible injustice of private banks being allowed to create over 90% of our money as loans on which they charge us interest. Wealth would cease to be concentrated in fewer and fewer hands as a result of private bank money creation. Thereafter, apart from a regular 3% annual increase (roughly matching population growth), only Congress would have the power to authorize changes in the U.S. money supply for public use; not private banks increasing only private bankers’ wealth.


Monetary Reform Act


The complete text of the Monetary Reform Act is presented in Appendix XI of The Reclamation Manifesto - Book I. The Act is as of October 16, 2011 and is a draft in 17 sections by Patrick Carmack, J.D.; Copyright 1996. All rights reserved. A free copy of the Act, is available in different formats from www.themoneymasters.com who maintains that minor revision of the Act is an ongoing process in response to suggestions received.


“As you know, I am entirely sympathetic with the objectives of your [Patrick Carmack] Monetary Reform Act...You deserve a great deal of credit for carrying through so thoroughly on your own conception…I am impressed by your persistence and attention to detail in your successive revisions…Best wishes, Milton Friedman” -- Nobel Laureate in Economics; Senior Fellow, Hoover Institution on War, Revolution and Peace.



Final Comment


Folks, this Monetary Reform Act is a brilliant piece of work although it still requires some tinkering. It essentially cripples the International Banking Cartel in the United States of America. It resolves the National Debt, The Federal Reserve and our Fiat Currency. It eliminates the personal income tax and the IRS since the private credit scam is over and it represents the first step in the makeover of the Financial Services sector.


Taken together, this Act and the Reclamation Amendment, along with the re-institution of the original 13th Amendment resolves most of the root problems of what is wrong with America. The repeal of the 16th and  17th Amendments to the Constitution will restore the remaining sovereignty of We the People and the several States.



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