Author Archives: Ellen Brown

The public bank option—safer, local and half the cost

A UK study published on October 27, 2017 reported that the majority of politicians do not know where money comes from. Continue reading

Regulation is killing community banks–public banks can revive them

Crushing regulations are driving small banks to sell out to the megabanks, a consolidation process that appears to be intentional. Publicly-owned banks can help avoid that trend and keep credit flowing in local economies. Continue reading

How to wipe out Puerto Rico’s debt without hurting bondholders

During his visit to hurricane-stricken Puerto Rico, President Donald Trump shocked the bond market when he told Geraldo Rivera of Fox News that he was going to wipe out the island’s bond debt. Continue reading

How to fund a universal basic income without increasing taxes or inflation

In May 2017, a team of researchers at the University of Oxford published the results of a survey of the world’s best artificial intelligence experts, who predicted that there was a 50 percent chance of AI outperforming humans in all tasks within 45 years. All human jobs were expected to be automated in 120 years, with Asian respondents expecting these dates much sooner than North Americans. In theory, that means we could all retire and enjoy the promised age of universal leisure. But the immediate concern for most people is that they will be losing their jobs to machines. Continue reading

Saving Illinois: Getting more bang for the state’s bucks

Illinois is insolvent, unable to pay its bills. According to Moody’s, the state has $15 billion in unpaid bills and $251 billion in unfunded liabilities. Of these, $119 billion are tied to shortfalls in the state’s pension program. On July 6, 2017, for the first time in two years, the state finally passed a budget, after lawmakers overrode the governor’s veto on raising taxes. But they used massive tax hikes to do it—a 32% increase in state income taxes and 33% increase in state corporate taxes—and still Illinois’ new budget generates only $5 billion, not nearly enough to cover its $15 billion deficit. Continue reading

Sovereign debt jubilee, Japanese-style

Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year. Continue reading

Dear Mr. President, be careful what you wish for: higher interest rates will kill the recovery

Responding to earlier presidential pressure, the Federal Reserve is expected to raise interest rates this week for the third time since November, from a fed funds target of 1% to 1.25%. But as noted in The Guardian in a March 2017 article, titled “Trump Is Set to Win the Battle on Interest Rates, but US Economy Will Pay the Price”: “An increase in the base rate, however small, will tighten the screw on younger voters and some of the poorest communities who voted for him and rely on credit to get by. Continue reading

If China can fund infrastructure with its own credit, so can we

May 15–19 has been designated “National Infrastructure Week” by the US Chambers of Commerce, the American Society of Civil Engineers (ASCE), and over 150 affiliates. Their message: “It’s time to rebuild.” Ever since ASCE began issuing its “National Infrastructure Report Card” in 1998, the nation has gotten a dismal grade of D or D+. In the meantime, the estimated cost of fixing its infrastructure has gone up from $1.3 trillion to $4.6 trillion. Continue reading

What a state-owned bank can do for New Jersey

Phil Murphy, the leading Democratic candidate for governor of New Jersey, has made a state-owned bank a centerpiece of his campaign. He says the New Jersey bank would “take money out of Wall Street and put it to work for New Jersey—creating jobs and growing the economy [by] using state deposits to finance local investments . . . and . . . support billions of dollars of critical investments in infrastructure, small businesses, and student loans—saving our residents money and returning all profits to the taxpayers.” Continue reading

Trumpcare/Ryancare dead on arrival: Can we please now try single payer?

The new American Health Care Act has been unveiled, and it has been pronounced an even greater disaster than Obamacare. Dubbed “Ryancare” or “Trumpcare” (over the objection of White House staff), the Republican health care bill is under attack from all sides, with even conservative leaders calling it “Obamacare Lite,” “bad policy,” a “warmed-over substitute,” and “dead on arrival.” Continue reading

How to cut infrastructure costs in half

Americans could save $1 trillion over 10 years by financing infrastructure through publicly-owned banks like the one that has long been operating in North Dakota.

President Donald Trump has promised to rebuild America’s airports, bridges, tunnels, roads and other infrastructure, something both Democrats and Republicans agree should be done. The country needs a full $3 trillion in infrastructure over the next decade. Continue reading

The Italian banking crisis: No free lunch—or is there?

On December 4, 2016, Italian voters rejected a referendum to amend their constitution to give the government more power, and the Italian prime minister resigned. The resulting chaos has pushed Italy’s already-troubled banks into bankruptcy. Continue reading

‘We’ll look at everything’: More thoughts on Trump’s $1 trillion infrastructure plan

The Trump agenda, it seems, is not set in stone. The president-elect has a range of advisors with as many ideas. Steven Mnuchin, his nominee for Treasury secretary, said in November that “we’ll take a look at everything,” even the possibility of extending the maturity of the federal debt with 50-year or 100-year bonds to take advantage of unusually low interest rates. Continue reading

Trump’s $1 trillion infrastructure plan

Lincoln had a bolder solution

In Donald Trump’s victory speech after the presidential election, he vowed, “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.” Continue reading

Prop. 51 versus a state-owned bank: How California can save $10 billion on a $9 billion loan

School districts are notoriously short of funding—so short that some California districts have succumbed to Capital Appreciation Bonds that will cost taxpayers as much is 10 to 15 times principal by the time they are paid off. By comparison, California’s Prop. 51, the school bond proposal currently on the ballot, looks like a good deal. It would allow the state to borrow an additional $9 billion for educational purposes by selling general obligation bonds to investors at an assumed interest rate of 5%, with the bonds issued over a five-year period and repaid over 30 years. $9 billion × 5% × 35 equals $15.75 billion in interest—nearly twice principal, but not too bad compared to the Capital Appreciation Bond figures. Continue reading

Central Bank Digital Currencies: A revolution in banking?

Several central banks, including the Bank of England, the People’s Bank of China, the Bank of Canada and the Federal Reserve, are exploring the concept of issuing their own digital currencies, using the blockchain technology developed for Bitcoin. Skeptical commentators suspect that their primary goal is to eliminate cash, setting us up for negative interest rates (we pay the bank to hold our deposits rather than the reverse). Continue reading

Can Jill carry Bernie’s baton?

A look at the Green candidate’s radical funding solution

Bernie Sanders supporters are flocking to Jill Stein, the presumptive Green Party presidential candidate, with donations to her campaign exploding nearly 1000% after he endorsed Hillary Clinton. Stein salutes Sanders for the progressive populist movement he began and says it is up to her to carry the baton. Can she do it? Critics say her radical policies will not hold up to scrutiny. But supporters say they are just the medicine the economy needs. Continue reading

Japan’s “helicopter money” play: Road to hyperinflation or cure for debt deflation?

Fifteen years after embarking on its largely ineffective quantitative easing program, Japan appears poised to try the form recommended by Ben Bernanke in his notorious “helicopter money” speech in 2002. The Japanese test case could finally resolve a longstanding dispute between monetarists and money reformers over the economic effects of government-issued money. Continue reading

The war on weed, part II: Monsanto, Bayer, and the push for corporate cannabis

California’s “Adult Use of Marijuana Act” (AUMA) is a voter initiative characterized as legalizing marijuana use. But critics warn that it will actually make access more difficult and expensive, squeeze home growers and small farmers out of the market, heighten criminal sanctions for violations, and open the door to patented, genetically modified (GMO) versions that must be purchased year after year. Continue reading

Brexit and the derivatives time bomb

Sovereign debt—the debt of national governments—has ballooned from $80 trillion to $100 trillion just since 2008. Squeezed governments have been driven to radical austerity measures, privatizing public assets, slashing public services, and downsizing work forces in a futile attempt to balance national budgets. But the debt overhang just continues to grow. Continue reading

The war on weed is winding down—but will Monsanto be the winner?

In April, Pennsylvania became the 24th state to legalize medical cannabis, a form of the plant popularly known as marijuana. That makes nearly half of US states. A major barrier to broader legalization has been the federal law under which all cannabis—even the very useful form known as industrial hemp—is classed as a Schedule I controlled substance that cannot legally be grown in the US. But that classification could change soon. In a letter sent to federal lawmakers in April, the US Drug Enforcement Administration said it plans to release a decision on rescheduling marijuana in the first half of 2016. Continue reading

‘Print the money’: Trump’s ‘reckless’ proposal echoes Franklin and Lincoln

“Print the money” has been called crazy talk, but it may be the only sane solution to a $19 trillion federal debt that has doubled in the last 10 years. The solution of Abraham Lincoln and the American colonists can still work today. Continue reading

Bank of North Dakota soars despite oil bust: A blueprint for California?

In November 2014, the Wall Street Journal reported that the Bank of North Dakota (BND), the nation’s only state-owned depository bank, was more profitable even than J.P. Morgan Chase and Goldman Sachs. The author attributed this remarkable performance to the state’s oil boom; but the boom has now become an oil bust, yet the BND’s profits continue to climb. Its 2015 Annual Report, published on April 20th, boasted its most profitable year ever. Continue reading

The war on savings: The Panama Papers, bail-ins, and the push to go cashless

The bombshell publication of the “Panama Papers,” leaked from a Panama law firm specializing in shell companies, has triggered both outrage and skepticism. In an April 3 article, titled “Corporate Media Gatekeepers Protect Western 1% From Panama Leak,” UK blogger Craig Murray writes that the whistleblower no doubt had good intentions; but he made the mistake of leaking his 11.5 million documents to the corporate-controlled Western media, which released only those few documents incriminating opponents of Western financial interests. Continue reading

The populist revolution: Bernie and beyond

The world is undergoing a populist revival. From the revolt against austerity led by the Syriza Party in Greece and the Podemos Party in Spain, to Jeremy Corbyn’s surprise victory as Labour leader in the UK, to Donald Trump’s ascendancy in the Republican polls, to Bernie Sanders’ surprisingly strong challenge to Hillary Clinton—contenders with their fingers on the popular pulse are surging ahead of their establishment rivals. Continue reading

A crisis worse than ISIS? Bail-Ins begin

While the mainstream media focus on ISIS extremists, a threat that has gone virtually unreported is that your life savings could be wiped out in a massive derivatives collapse. Bank bail-ins have begun in Europe, and the infrastructure is in place in the US. Poverty also kills. Continue reading

Reinventing banking: From Russia to Iceland to Ecuador

Global developments in finance and geopolitics are prompting a rethinking of the structure of banking and of the nature of money itself. Continue reading

Hang onto your wallets: Negative interest, the war on cash, and the $10 trillion bail-in

Remember those old ads showing a senior couple lounging on a warm beach, captioned “Let your money work for you”? Or the scene in Mary Poppins where young Michael is being advised to put his tuppence in the bank, so that it can compound into “all manner of private enterprise,” including “bonds, chattels, dividends, shares, shipyards, amalgamations . . .”? Continue reading

How Obama could beat the debt ceiling and go out a hero

On November 3, the US government will again run out of money due to a debt ceiling artificially imposed by Congress. This is the third time in four years that a radical faction has taken the country to the brink of default to extort concessions that are at best only marginally related to the budget. Continue reading

Killing off community banks: Intended consequence of Dodd-Frank?

At over 2,300 pages, the Dodd Frank Act is the longest and most complicated bill ever passed by the US legislature. It was supposed to end “too big to fail” and “bailouts,” and to “promote financial stability.” But Dodd-Frank’s “orderly liquidation authority” has replaced bailouts with bail-ins, meaning that in the event of insolvency, big banks are to recapitalize themselves with the savings of their creditors and depositors. The banks deemed too big are more than 30% bigger than before the act was passed in 2010, and 80% bigger than before the banking crisis of 2008. The six largest US financial institutions now have assets of some $10 trillion, amounting to almost 60% of GDP; and they control nearly 50% of all bank deposits. Continue reading

Time for the nuclear option: Raining money on Main Street

Predictions are that we will soon be seeing the “nuclear option”—central bank-created money injected directly into the real economy. All other options having failed, governments will be reduced to issuing money outright to cover budget deficits. So warns a September 18 article on ZeroHedge, titled “It Begins: Australia’s Largest Investment Bank Just Said ‘Helicopter Money’ Is 12-18 Months Away.” Continue reading

Quantitative easing for people: The UK Labour front-runner’s controversial proposal

Dark horse candidate Jeremy Corbyn, who is currently leading in the polls for UK Labour Party leader, has included in his platform “quantitative easing for people.” Continue reading