Source: Kerry Bolton

In previous articles for Katehon I have dealt with the alternative to international finance – usury – as being for the State to assume the prerogative to create and issue its own credit. Although this has been successfully done throughout history, bringing prosperity to those states and even local communities that have, the idea continues to be derided by politicians and economists as “inflationary” and often disparaged without debate as “funny money.” Yet “fiat money” and “Quantitate Easing” ironically are used as a last resort by states when financial chaos threatens because of debt accumulation. Then “fiat money” and QE suddenly become acceptable, and indeed bail-out the banks that created the debt and that are normally adamant in their opposition to state interference in finance.

What is crucially missing in the recent use of “fiat money” and QE however is that instead of the state printing and issuing money directly to the community through a “basic income” or “national dividend”, or spending it into circulation via state projects, it is advanced to the private banking system. So far from reducing debt therefore, the credit advanced to the banks is used to accumulate further debt. It is therefore not fiat money that is a problem, but the manner by which it is circulated. Hence state credit and money are anathema to the plutocrats until needed to prop up their debt system and get them out of problems of their own making.

The creative use of fiat money on a wide, nation-wide scale was that of the $4,000,000,000 U.S. Treasury Notes issued under the Kennedy Administration in 1963. It is significant that these were Treasury Notes and not Federal Reserve currency.