Ellen Brown | Bankster Thugs, The Web of Debt, & The Public Banking Solution

00:04 In the 1930s, President Franklin Delano Roosevelt addressed a nation through a series of radio broadcast known as the Fireside Chats. His aim was to reassure the common man that our society would recover from its troubled times but we're far from 1930 and I deal with a different kind of fire For a new era of worldly frustration We offer a fresh conversation! I'm Greg Carlwood These are The Hireside Chats Hallelujah people, drinking a little drink. Smoking a little smoke! It is Super Bowl Sunday and I am here in the office working for you and having a super bowl of my own if you know what i mean? I'm Greg Carlwood from sunny San Diego and today we're going to get deep into economics both domestic and around the world We're gonna talk about banking systems beyond our own fractional reserve debt based system of economic enslavement And see if we can't find some things out there that are better

01:00 It's a nice compliment to the last episode with Jen Briney where we talked about corruption in government and now we're going to talk about corruption in the economic sector. I did get some heat this week from people that didn't like that show saying that government is the problem and voting isn't gonna help anything, but it's not like you get a choice between less government or more, you get what is there around you and if you want less government then vote for that and whittle away at nearly nothing. Or, if you want to get rid of the Federal Reserve and move to a public banking model like we talk about today that's going have to be voted on. Saying you don't like this system and sitting at home talking about the one that you'd rather have doesn't get any closer so it is important to know what is going on. A cynic might say voting doesn't matter its just illusion of choice which is true on one hand I dont know if we can even

01:57 get out of the wars we're in, I don't think they really let us vote on that. But on the other hand Chattanooga has publicly funded lightning speed internet and you don't Colorado and Washington have legal marijuana and you probably do not And like we talk about today North Dakota has a well functioning public bank that nobody talks about because they don't seem to want this idea spread but there are fights to be had And our system is terrible. I want a new one." But sitting at home and saying that doesn't move the needle anywhere, that's the point Not that big government is the answer just that participation is and with that said let's dive into this one Let's talk about the systems that work in the ones that don't in the world of economics with the brilliant Ellen Brown

02:44 Alright people, as we know the banking structure of a nation can be its biggest enslavement mechanism or its biggest liberator. Unfortunately the people of Earth are way more familiar with the debt-based system of rule than the possibilities of empowerment but lucky for us today's guest is very familiar with both the vast problems of the current paradigm, as well as several possible solutions that are probably pretty new to most of us. Her name is Ellen Browne founder of The Public Banking Institute and author of a dozen books including her best sellers Web of Debt and The Public Banking Solution she's here to give us a serious economic education I can think no one better so psyched ever hear Ellen welcome to THC Thanks Greg

03:23 No problem, thank you. I'm super impressed with how knowledgeable you are on these things. You know economics seem to be presented in overly complicated terms just to turn people off from understanding how the economy really works and i know you present some great solutions but first let's spend some time on the problems so people can really get a sense for how much room there is for improvement here Yes, unfortunately the big banks which caused the problem

04:00 I have come out on top. They are back to paying themselves the huge bonuses like they were before. You do see that their stock hasn't been doing too well lately and there are more and more lawsuits against them, but nobody ever goes to jail in that the f nl the savings and loan crisis i think a thousand people went to jail and nobody has gone to jail over this one because they've managed to manipulate the lives as well as everything else there so inc control in control of congress and in controller the media that they manage to change their life so everything they do is technically more or less legal and i think that are at legal

04:41 many of which they've been caught in lately date nearly get fined for it which the fine do not hurt them personally they still get their bonuses are imposed on maybe higher i mean there are both and the people that customers there though at this year holders there the ones that wind up paying a fine not the real perpetrators have these various crimes which include things like manipulating the LIBOR rate which affected $400 trillion in interest rate swaps. So hugely important frauds here going on that they really haven't been taken to task for and that are still going on

05:24 Hmm, and the LIBOR scandal to elaborate on that a little bit. That is when the major banks I guess which are supposed to operate under a particular interest rate they actually worked together to alter that rate? It's a little confusing for me Yeah well the LIBOR rate is set in London it's the London Interbank offering rate so the way they did the rate is this collection of big banks tell each other what rate they think they are going to get that day and they all sort of collude on what the going rate is, and then that's the LIBOR rate. But there are all these contracts based on that so your variable

06:07 rate mortgages, most mortgages today I think are variable interest rate which means they go up or down depending on what the prevailing rate is and our US contracts are largely based on the London rate, the London Interbank Offering Rate. Some of our big banks are included in that like JP Morgan Chase and Citigroup etc., so they were caught in that fraud. They were clearly manipulating their rates. They were colluding with each other to decide what the more favorable rate was and it's that they have these huge investments in interest rate swaps where it's to the advantage of the big banks that the interest rates remain low. It's pretty complicated but state and local governments particularly have been caught in these or things like

06:59 Well, for example I'm from California so the University of California system which is statewide and involves a huge amount of money they had various contracts or various loans where they would buy an interest rate swap from the banks to guarantee that the interest rate didn't go up. And in fact, the interest rates went very low and not as something like an act of God it's not like a flood or fire where it just hits randomly maybe only hits one or two houses in that city this is something that the interest rates were manipulated

07:39 very low by the Federal Reserve which is composed of 12 branches all of which are 100% owned by the banks in their districts. So it's a banker-owned, banker manipulated entity which set the rates very low to protect the interest of the banks but it hurt, hugely hurt the state and local governments, so we're on the other side of these bets. All derivatives by the way are basically just bets that's another one of those very complicated words that at first when we first heard about collapse in 2008 nobody even knew what a derivative was I had one of my more popular articles was called It's The Derivatives Stupid

08:23 because nobody really, nobody even knew about that particular factor going on. So now everybody's heard of derivatives but basically what they are is you can bet on anything. You can bet on the price of tea in China. But usually it's interest rates or exchange rates Those are the credit default swaps to protect against default on a loan. So right now we have a huge mess with the credit default swaps on these oil derivatives which are going to probably cost the banks hugely but that's another issue.

09:04 Man, it's so intertwined and everything seems to be just this big snowball that is getting worse. But yet if you watch the news sometimes they're trying to tell us there is a bit of recovery or that unemployment isn't that bad They'll point at one or two small little things and say its an indicator of some type of stabilization or recovery And uh... It doesn't seem that way to me and it tough to believe anything on the news but what would you say is the real climate out there for the past couple years? Well, we're basically living in two economies. Things are going very well for the 0.01% or even the 1%, let's say. The stock market has last year...the stock market boomed right now it seems to be up and down probably largely because of the oil crisis and things going on in Europe but in general the wealthy are getting wealthier and you could there was this book

10:00 book that was the number one bestseller in 2013, which is unbelievable because it was an economic textbook written by a Frenchman and it was 700 pages long called Capital In The 21st Century. But what he basically did was to show that the old myths about capitalism are simply not true. In other words, a rising tide does not lift all boats In fact, the rich are getting richer and the poor are getting poorer. Markets do not self-correct. Markets do not police themselves that you really need more government. You need regulation to stop that but I would argue

10:45 Even regulation is not going to work. We really have to have a different system, I mean it's the system itself that's wrong you could throw all these people in jail and another thousand would step up and fill their shoes until you fix the leaky holes in the system your not going to have these problems I totally agree with you there, because some people are saying oh if we just bring back Dodd-Frank or Glass-Steagall that'll solve the problems and yeah maybe for a little while but these guys are super powerful they own the government and they reel back any red tape that they need to in just a year two

11:22 Yeah, and those they were repealed in the first place because There were problems with them. So they would probably wind up getting repealed again or you know are just not implemented like there was an attempt to reinstate something like the Glass-Steagall Act which is a separation of investment banking from depository banking so that that would protect our deposits though you could let the bank gamble all they want to have it is but they're not using our deposits to do it right now they are using our deposit and allowed to use their deposit so we can well get wiped out at with that said the vocal rule was part of the dot frank act which has passed in twenty ten which

12:09 the president went on TV and proudly proclaimed that this meant there would be no more bailouts, but thatís absolutely not what it meant. What it meant was there wonít be more bailouts because weíre going to bail in your money. In other words, weíre going to take the depositorsí money. So the Volcker rule was totally diluted and now itís pretty much diluted out of any sort Yeah, it seems to be the same pattern anytime there's something they don't like. But you did mention the oil prices and I wanted to ask you about what is going on there of course people can be pretty short sighted that are only really concerned about the price at the pump and obviously it's pretty low so people generally think thats a good thing but oil prices are such a part of the global economy that it seems like theres probably a much bigger issue here right?

12:55 There are a number of bigger issues. First of all, the main industry that has caused the so-called recovery in US has been the shale oil business and those people are greatly hurt by prices that were only 50% what they were last summer and they have all these, there was all this junk bonds that they used to finance these startup businesses and all these investors like pension funds which is us jumped in on them because they had a high rate of return. And those junk bonds are now in serious trouble and there's derivatives on the junk bond. A junk bond is just

13:42 a bond, it's very risky bond. It's alone to some company that may or may not manage to pay it back and in this case is looking like a lot of those companies are not going to pay it back and they're going into default and liable to go bankrupt and some have already gone bankrupt. There was a big Canadian oil company that went bankrupt and one of their big investors a big Canadian pension fund so they're going to take a huge hit. So once again it's the people who take the hit and of course these start-up oil companies have hired a lot of people and so a lot of that so called recovery in employment has been due to oil, so if the oil prices are only half what they were thats gonna hurt all that

14:29 And in fact, the fact that they dropped by 50% in a mere six months is unheard of. I mean those are not normal market forces that caused that. That was manipulated. John Kerry who was our Secretary of State went to Saudi Arabia and negotiated something before these oil prices suddenly collapsed and the Saudis have so what happened was the Saudis flooded the market with oil. And of course they can get their oil right out of the ground and it's much cheaper for them to produce than for the shale oil companies which have very high production costs, So the Saudis can withstand

15:13 a low oil price for a lot longer than we can. So either the Saudis themselves were attempting to put the US shale oil companies out of business, their competitors or they are attempting to get Russia and get Iran and get Syria which are all big oil producers And that was what John Kerry collaborated in order to happen, because apparently we consider them our big... somehow a competitor is considered an enemy. An economic competitor has now become an economic war where it just seems to be justified

15:55 to do all these things that totally cripple the people of that population, like you know the Russian population or the Iranian population. I mean sanctions aren't just against a leader, the sanctions hurt the people and we've never declared war so what right do we have to impose these sanctions? Right it seems like sanctions are always tool to just try to get a government's population To be so upset that they can use their own population as a weapon against the government, but you know people have been used as pawns Since the beginning of this round of recorded history and why should these days be any different? But I was kind of curious about

16:38 Russia's role in all this are they okay with the market getting flooded with oil perhaps because that price is tied to the US dollar? No, the Russians are hurt by the lower oil price just like everybody else I mean you know They're a major oil producer and so that does hurt them in their international markets but internally they're doing fine because internally pay you the rebel and that they have resources of every sort i mean they really have everything they need to survive ever after i read a lot about putting statements then uh... his advisor statements and so forth and day they are ready for a long siege they know that there being

17:20 economically attacked and the people of they've been under siege before and a if they're prepared for this they've got lots of farmland and that the people actually on their own pop plot to blame not now since he i incurred with lifted it may be semi capitalized but they they still have a lot of social services that we don't have. So the people can deal with a lot more cutbacks than we can, and it hasn't caused the people to rise up against Putin. It's made them support him all the more because they're aware that it's us doing it and not him. Gotcha so that makes a lot more sense like he's willing to weather the storm because he feels that Russia is better prepared then United States might be

18:09 Yeah, well there's not too much you can do about it. I think we're trying to egg him into war but which is insane right But at least he has the good sense not to take the bait on that yeah It's uh It's definitely a tangled web of a lot of stuff going on. But we also saw, kind of like you were talking about with the junk bonds, we saw a lot of junk housing loans and predatory housing loans because these big banks seem to think that there is more money in stringing a person along rather than working with the type of person who could actually pay you off Obviously, that was a huge problem. But I've heard this practice has really been ramping up in car loans a little bit which is kind of funny because i do know two people with recent bankruptcies that also got new long-term car loans and I'm kinda curious... Is this something people should be wary of? Obviously you shouldn't be taking on more debt in this kinda climate

19:01 Right, I saw that student loans have gone up to one and a half trillion dollars which is the same amount of money that we paid in Iraq and Afghanistan wars. In other words if we weren't in these two wars we could have put our students through college for free like they do in other countries particularly European countries I saw that same thing about car loans, they're anticipating a wave of defaults in car loans and student loans and in these junk bond oil loan.

19:39 So we're looking at probably another 2008, only this one's liable to be quite a bit worse because the whole shadow banking system has grown larger. The derivatives, the bets that are placed on all these debts Yeah, it sounds pretty scary. I wanted to talk a little bit about when it comes to the bank bailouts that happened and there were countries out there that didn't take the bait they didn't bail out their big banks like we did you know we heard about them at the time but can you give us an idea of how these economies are going compared to the ones that did go too-big-to-fail route?

20:17 Well, Iceland was one of those countries. Iceland is not a member of the EU they had a big political debate over that because The politicians wanted to be...they were trying to be members of the EU and that's why they wanted to actually pay off these debts to foreigners uh... but the people rebelled and so there is kind of a populist movement in this very small country that day if people are managed to persuade them not to pick not to pay at least that's that it wasn't their problem that these banks have gone bankrupt and they have definitely come out better for all that then for example greece which is one that did um... knuckle entered to the demands of thing

21:06 IMF, the EU and ECB which is the European Central Bank are now stuck with all these austerity measures that have been forced on them. Ireland's the same way and Portugal and Spain and Italy – all those countries are suffering under austerity. Another one that has bucked this system – I mean they're not doing real well right now but they're certainly doing better than than they were is Argentina which in 2000, Argentina went bankrupt and so President Kirchner just said we can't afford these debts and so we're not going to pay them. We're going to print our own money and turn our resources inwards and develop our economy that will get back to you when we've got some money to pay you.

21:58 consider it and they did actually pay off the IMF later which many people thought was a mistake because it sort of got them back into the same debt situation that they were before but in a much stronger condition at least. But then now recently, the vulture funds are insisting on their pound of flesh for these These are funds that had bought a very small portion of the Argentine debt and they weren't the original lenders at all. They came in and bought up these bonds for almost nothing, now they're demanding 100% on the dollar and refusing to pay back.

22:38 to negotiate. So this is destroying Argentina's deal with their other creditors, who are the bulk of their creditors agreed to a work out something they could actually afford and these few hold up vulture funds are evidently just trying to bankrupt Argentina force them into some sort something similar to a bankruptcy court which would sell off their assets to pay off the creditors, which means selling off large portions of their land like Patagonia, which is this very choice land that apparently some well-funded banker types have had their eyes on for a long time.

23:19 Yeah, and they're super aggressive about getting what they want. Man so we did this show recently where we talked about the 2015 national budget a little bit and apparently there was a writer added that Wall Street was really pushing for that put us on the hook for more of their gambling then that might be what might lead to another 2008 situation can you tell us a little bit about that? Yeah, well as usual Congress was unable to agree on a budget until the last minute and so they were forced into this very lengthy budget bill which included all these provisions that had nothing to do with budget. I mean they shouldn't allow that stuff in a budget bill at all but for some reason

24:01 that's the way it is. It's basically bribery, it's like we'll give you this concession and that concession if you agree to our budget so buried in there which apparently nobody would have noticed of Elizabeth Warren hadn't gone on the warpath over and done a very compelling speech was this a provision that said that the last bit of the Dodd-Frank Act had said that banks could not gamble with their deposits for certain risky investments, for their own account in

24:41 derivatives basically gambling in derivatives and using or commingling their funds doing this through the depository wings of their banks which is where our deposits are. It was just this last 5% that Beyond that, 95% of those derivatives were already considered okay because they were somehow related to their business rather than making money for themselves. But this last 5%, which is now covered basically guaranteed by the FDIC which means us, the depositors was the 5% that includes commodities and oil derivatives. So obviously they were worried about these oil derivatives they know their going down it was Citigroup that wrote this rider and pushed for it

25:28 and jp morgan actually joined in and and lobbied for it and the president himself lobbyed for itself he had a clear way being approached by the big banks so why did they care about this was the measly five percent it was because they knew that these oil derivatives are going bad going horribly bad city group apparently has been doubling down on their best the amount of their derivatives is gone up radically in the last six months because they were doubling down on these oil derivative bets which is going to be a losing proposition. Bank of America and JP Morgan Chase both have over $1 trillion in deposits, and last I looked they both had over 70 trillion in derivatives so maybe Bank of America has slipped down from that but

26:18 Anyway, they have a huge amount of derivatives and under the Bankruptcy Reform Act of 2005, derivatives go first in bankruptcy. So they get to snatch the collateral before anyone else so even the FDIC which guarantees that's their Federal Deposit Insurance Corporation which guarantees our deposits up to $250,000 dollars they only have 46 billion in their fund four and a half trillion in deposits. And so let's say just one of those went down, let's say Bank of America was gambling and their Merrill Lynch wing has now been merged with their depository Bank of America wing. So Merrill Lynch can effectively gamble with our deposits. Let's say that they had a huge

27:08 derivatives bust. Between all these banks, they could easily have $3 or 4 trillion in derivatives losses because of their derivatives on all these junk bonds and on the price of oil, et cetera. So that's far more than... They could wipe out the deposits in other words it could wipe out the collateral before the FDIC even gets up there and also before the state local governments get up there which they think are okay because their deposits are collateralized but the collateral this gets very complicated but the collateral is typically federal securities, short-term federal securities which are then used by the bank as collateral in the repo market which is part of this shadow banking system. So all that collateral could... In other words a collateral is used more than once so it could all disappear in a big bankruptcy before the state and local governments got to it. My favorite solution is a public bank which we need in order to have a safe place

28:11 our state and local money, which is like our public money as well as our private money. Right and I did want to ask you about public banking And we should just get into that now it is a pretty different idea people who've been living in the United States their entire life have never seen really any alternative To what? We have this debt based fractional reserve system So tell us a little bit about how public banking works. Public bank means, I'm founder of the Public Banking Institute and we kind of coined the term public banking because when I first started saying that people would say well a public bank is one that's publicly listed on the stock exchange right? But it's not what were talking about, were talking about a bank that is

28:58 owned by the public. So it's either owned by the state or city, or county. A public bank could also be one owned by federal government but in US it is so hard to get Congress to do We have one, only one in the whole country state-owned bank and thatís in North Dakota. And North Dakota is the only state that never went into the red after 2008 and it was a was sporting a budget surplus all that time. In fact, when all the other states were trying to figure out where to find the money to balance their budgets North Dakota was trying to figure out what to do with the excess they were debating whether should they cut taxes or should they do more infrastructure

29:52 So something was working really well for North Dakota. Some people say it's all about oil, because North Dakota does have an oil, shale oil boom. And so it'll be really interesting to see what happens now that these shale companies are doing so well. But I argued... Well, there was a recent Wall Street Journal article that showed that the Bank of North Dakota is more profitable even than the Wall Street banks. The theory of the man who wrote that article was that it's because they're getting all these extra deposits from the state because of these oil revenues, but the excess deposits are just going into excess reserves

30:33 Just as say JPMorgan Chase, they have lots of extra deposits which have just gone into excess reserves which they've gotten because of quantitative easing. Another very complicated subject but anyway that doesn't prove it. The fact that they've got an extra deposit does not necessarily help the bank. They're not making more loans since the oil boom and the oil boom didn't really hit until 2010 and they were already state that was in the black in 2008. But because of that challenge, the oil challenge I wrote a sequel to Web Of Debt which is called The Public Bank Solution where I looked at public banks globally and historically and it turns out to my own surprise that 40% of banks globally are publicly owned.

31:27 largely in the BRIC countries, Brazil, Russia, India and China which house 40% of the global population and which all escaped the credit crisis at least initially. I mean every country now is feeling the effects but for the first couple years they were still just growing like gangbusters while we in European countries were being crippled by this whole crisis. I just saw a report recently that Germany, for example has this very strong public banking tradition where these are local public banks that are owned by the provinces and they have a mandate to serve

32:10 the local community businesses so they make loans to the local businesses that the big banks may have considered riskier, wouldn't have bothered to make because they're just so small that they can't make enough money for it. You can make as much money making a billion dollar loan to a hedge fund is you can make It takes no more work to do the paperwork for a billion dollar loan for hedge fund as for $10,000 loan for little startup business. Of course they're not making loans to the startup businesses but these local Sparkas and banks

32:48 have a responsibility to make loans for those little businesses and they're right there in the local community so they know these people, they know the business and whether or not their credit worthy. So they've been very successful and I just saw this recent data had come out showing that they too were significantly more profitable not just that they serve the community and help stimulate It's a very successful model that has been suppressed. We've never heard anything about it because the media are owned by the big banks."

33:31 Yeah, that's exactly what I was going to say. This North Dakota bank is kind of new to me and then you were talking about some people who are writing articles about it might have been this or it might have been that and for an economist its got to be pretty easy to see the public bank as the answer but I just, I figured yeah they probably are trying to come up with any other scapegoat they can to distract attention away from the public bank being successful in this situation because they don't want people to start being like well why don't we have one out in California? Why don't we have one in Missouri. Yeah and then Europe there being... They're really under attack just like Russia is. I mean Russia sort of has its own well they certainly have their own currency

34:17 It's another model of banking and in the past, banking itself has been a public utility publicly owned. The same with China and so forth. So in Europe, the Sparkasm banks are under attack. One reason that they do so well is that they have They don't have to advertise. They have an automatic deposit base because they get the deposits of, well in North Dakota anyway they get the deposits of the state itself and they basically have a guarantee of this state so that they donít have to worry about their capital. Technically, The Bank Of North Dakota is set up as

34:59 North Dakota doing business as the Bank of North Dakota so they're set up as a DBA The capital requirement has been raised by the Basel committee as part of Basel III which are these new regulations that are supposedly there to correct what went wrong in the 2008 crisis. So, what they've done is to require banks to hold more capital in case they have defaults and then it's from the capital that they can meet the demand for money from their depositors and so forth, or lenders. So they've raised this capital requirement which has crippled small banks everywhere because they're the ones that had problem with capital in the first place. The big banks already have plenty of capital. And in Germany, they're trying to impose

35:52 a capital requirement on them, whereas before these local banks had the backing. They're owned by the local province so they obviously have the backing of the province and they've got the assets for the province because we are in the province but there's this attempt by the ECB and the Troika which is the ECB, IMF and EU to impose new capital requirements on inhibit their ability and i think it'll be slow them up in nobody seems to understand that this if this model that has made the german economy stronger than all the european economies that's why they're doing so well everybody complains that way out thought about germany and you know protecting their profits and so forth

36:38 but why is Germany so strong in the first place? In Switzerland, another one that's very strong. Their economy is very strong because of this model where their local banks are publicly owned and they serve the community. So the Sparkas people knowing that they're under attack now have a campaign to help them help other countries set up similar banks. They are in Ireland right now for example helping the Irish to setup a similar model of local banks that will serve their local communities and itís not like theyíre

37:14 getting branches in another country. I mean, they're not allowed to spread beyond their local community. All they're trying to do is educate people and demonstrate by setting up models elsewhere that this is the way out of our problem, is to have the banks be a public utility that serves the local community. It's owned by the local community it serves the local community. So is this kind of like credit unions? Well, the difference is that a credit union is owned privately by individuals and so it does serve those individuals. So itís a cooperative model rather than sort of an elite top-down structure like the usual corporate model but

38:02 they still have to compete with the other banks for one thing. So, they don't have the huge capital and deposit base that you will get with a publicly owned bank. I mean they can't even take public deposits. They're just not big enough and there are other reasons why they can't take them. they have to post collateral and once they do that, they don't even want the deposits because what good are they if they've had to use them to buy this collateral to back them with. And they generally serve the private individuals. They make loans for those individuals for mortgages and so forth but they aren't really there to make loans to businesses in local community and it's the businesses

38:45 the small and medium sized businesses that create most of the jobs. And that's what we really need is somebody that'll make loans to these businesses. Yeah, and so I think this sounds awesome. Obviously any solution seems to be better than what we have now which is really about as bad as I can imagine it being but there are a lot People who are gonna be cynical these free market people who say well you can't trust the state this sounds like a socialist idea What do you say to those people because we're gonna have to get a lot of we're gonna get everybody on board To make any serious changes, so what do you tell those people that are afraid that this might be too socialistic or something?

39:26 Well, I've read statistics that every country is half socialist and a half. In other words, half privately owned and half publicly owned it's just the question of where you put your emphasis we are our biggest socialist engine is the military That is really a socialist entity. It's owned by the government, they take orders from the government, they're cradled to grave taken care of by the government but the problem is what is the product? The product is something that it It disintegrates, for one thing. It's not contributing to our local economy and it actually is destructive and kills people. That's not the product we really should be putting half of our tax money too. And that is actually where half of our tax money goes

40:17 other countries for example in costa rica and well they had a revolution in the nineteen forties ended dead winner of the revolution realize that he because if you were so poor they just rebelled against their very elitist structure they had been and uh... that winner as at the look that president realized that uh... if you wanted to prevent another revelation it's going to have to do something for the people so one thing he did with nationalized all the bank so they were there were no privately owned banks at that time and then there are now but their the public bank is still eighty percent of deposits aryan publicly-owned banks and the people refuse to give them up because they're they just think it better service fair safer another thing he did eat there were a couple of clues military kids and so you can't eliminate it the military altogether they don't even have a military so while the money we could've favor for your limited our military

41:13 you're making me wanna move yeah uh... it union i would argue banking needs to be a public utility in order to preserve what we consider the capitalist model and other words uni date public banks to make loans to these little businesses so that they can start up and grow and compete with each other and do you wet america economy is supposed to do instead what we have today if he's giant banks that are basically a monopoly, they create our money. That's something else we probably should talk about but most people think that money is created by the government this is not true virtually all of our money is created by private banks when they make loans and it's virtually all today created by these

42:01 well, more than half created by these big maybe five banks create more than half the money in the system because they are these big monster banks that have eaten up all the others. So it's really not capitalism. They're not competing there. They're a cartel. They're in collusion with each other and you could see that for example with the Libra rate where they colluded to manipulate So how do you break them up? I mean, everybody criticizes the notion of too big to fail. The very fact that they are too big to fail or they've been declared too big to fail means we have to prop them up no matter what. They get to go first even at the expense of our deposits. That's what these latest bail-in

42:45 things This ties into a decision that was made at the G20, right? This has got a lot of people concerned or if they haven't heard about it yet They will be. Right the g-20 are the 20 well There's some argument about who should be in the G20 but anyway they are of the largest industrialized countries. They used to be the G7, so after the banking crisis in 1998, the G7 formed what was called The Financial Stability Forum to give advice on what banks should do and what requirements they should have and so forth in order to prevent another crisis like that Asian crisis from 1997-98

43:42 And then after the 2008 crisis, I mean if you want to get conspiratorially minded... We do. Yes! I know. I'm a writer so I love a good conspiracy theory myself. Where is the plot if we don't have some conspiracy going on here? But anyway you could argue and there is good evidence that The whole 2008 collapse was manipulated. Lehman Brothers did not have to go down, they were like the sacrificial lamb proving that we could not let these big banks go down and if we did the whole system would collapse so we had to prep them up no matter what

44:21 So after that 2008 crisis triggered by Lehman Brothers going bankrupt, in the spring of 2009, the G20 met in London and they all shook hands on something called the Financial Stability Board which The Financial Stability Forum was just an advisory board. You didn't have to follow them, they just gave you advice but the Financial Stability Board all the presidents and whatever leaders shook hands on being bound by the rules of this Financial Stability Board

44:59 The power to create rules was huge. It's very broad and very undefined, so at the time I wrote an article saying this is a bit shocking what have we just given up here? Sure enough in 2010 the Financial Stability Board came out with this mandate that the big banks should come up with what were called living wills, they were supposed say what they would do in the event of basically their bankrupt, in other words they're a zombie bank. They're dead and how they are going to keep themselves alive when they are really technically dead? What they were supposed to do, what they were told to do was turn their creditors money into equity and it turns out that depositors are the largest class of creditors of any bank

45:51 So that means they're supposed to turn our deposits that we put in there thinking we were doing that for safekeeping, they turn our deposits into their stock. When we thought we had cash that we could write a check on to pay our mortgage We now would have stock in a bank, which we would have to sell on the open market before we could get the cash. Because this bank is obviously in big trouble if it's gotten that far your stocks probably not going to be worth very much so basically we the shareholders would have to bail out the banks but it was very obscurely written and nobody really caught it or you know you certainly didn't read about it 2010

46:31 Then we saw what happened in Cyprus. I think I wrote one of the first articles about the Financial Stability Board and that this was a template, that they were going to be using this everywhere. It wasn't just the one-off thing that happened in Cyprus. I knew that was somebody several months before, somebody had written me this rather frantic panicked email with all in caps and said they're doing it. They're going to take our deposits and they... It was somebody in New Zealand who was talking about something that had been published in New Zealand about this resolution mechanism that all the banks were supposed to have and thatís basically what it was, they were supposed to take the deposits. So at the time because I seemed so over-the-edge and wasnít somebody I knew, I just kind of filed away as interesting since Iíve been writing on this stuff.

47:29 I've just become a magnet for all sorts of information. That's where I get the information, that's where I get them to keep... A lot of my information for the articles I write is that people just tip me off to all these things going on all around the world. It was sort of like because they don't write or they don't have a voice out there but they know things and their important things that they think need to be said and then I don't work for anybody. I'm basically technically retired, I'm a lawyer but long since retired so i really can

48:05 I really can't just try to explain it. To explain what's going on for people, and I don't have any particular...I'm not trying to sell investment advice or I'm not saying for this reason you should buy gold or for the...just trying to look at what's going on. I actually enjoy writing and I enjoy Making a good argument or making it clear get it up front what your point is the hook etc I'm my first degree was in English and my first love was writing. I went to law school because they quickly figured out I couldn't support myself as a writer

48:43 Well, we're lucky you do because if you weren't doing what you do and just a few other people there would be no education on this. The system doesn't like it or want it around. We don't want to know about public banks so they probably wouldn't a lot of us wouldn't know so we're very lucky and fortunate to have the handful of people like yourself that will actually tell it like it is. Oh thank you yeah, because I read everywhere but a lot of people do seem to be selling something and say you can't really trust their

49:19 what they're telling you. Of course I don't mind selling books, but I want my books to be honest! Why would anybody buy them if i wasn't actually revealing something that they need to know? So, this Financial Stability Board... no one paid much attention to it. We had Cyprus happen where the banks actually did take people's deposits I think it was only a certain amount though right? If you had more than $100k you lost it Yeah, a hundred thousand euros which would be... In the US we have the FDIC insures up to $250,000 but in the eurozone they insure up to 100,000 euros. Which I don't remember what exchange rate is for this? Would it be like something like 140,000 dollars or 120? I'm not sure. Yeah something like 140 I would think that's a very smart theft because the masses won't The masses aren't going to have that much money so they might just be like well you know

50:16 Yeah, rich people. They got a hundred grand still they're fine but it is still a major theft right? And the problem is that it was people think well It was the Russian oligarch so who cares they deserved it You know there are there were people that had put their money in in the Cyprus banks as a tax haven But it was mostly businesses local businesses There are the people to keep a lot of cash around because they have to meet their payroll So they have to be very liquid and Those are the people that hire people. When those businesses froze, which many of them did and couldn't pay their bills what happened was in the end they lost 50% of their deposits

50:58 If you had half your money wiped out as a business, obviously you're going to be laying off a lot of people. You're not going to be producing like before so it was terrible on the economy and it was terrible on jobs which is ordinary people felt the pinch and originally they first They were going to take a percentage of the ordinary depositors too, but there was so much protest over that they said alright we'll just take the one over 100 thousand. Right. Yeah, it seems much smarter because then the masses aren't going to be picketing outside the you know The city halls and the banks yeah I think there actually was a test run to see what see how people would react and see what they could get away with So they couldn't get away with taking that little guys deposits But they couldn't get away with taking them the big deposit so now that we know this has happened fairly recently in a major area well

51:57 What's the likelihood that it will actually or could actually happen in someone like the United States? We haven't seen anything like that in our lifetime. Of course, it has happened in the past but it seems like people aren't really afraid that could happen but it really could couldn't it? It could and it seems to me the fact that the big banks were so concerned in December that they pushed through that rider, basically FDIC coverage for their gambles on the oil derivatives. I think it could well be coming soon.

52:35 And I mean, all those protections are already in place. Now why did they bother to go to all that trouble if they the insiders didn't see this looming crisis? So, is there anything we can do? I mean of course we could go to a public banking system but if we can't change the whole banking system is there anything that listeners could do with this knowledge to not be just sitting ducks. I guess don't keep a lot of money in the bank perhaps Yeah, I always get asked that and of course it's... Any alternative you propose So really what we have to do is change the system and thatís why I keep pushing for, we need to get out there and get our legislators to act. At the Public Banking Institute, the website is publicbankinginstitute.org you can

53:29 go there and find people to meet with, to work in your area. So it seems to me we really do need to take political action and we need to do it fast and we need to educate our politicians on why this is important but for what you can do in the meantime first of all I would say keep a lot of cash around enough cash that meet at least a couple of months of expenses without writing it back on your bank account. Don't keep a lot of money in your bank account, I mean don't store your money there you know? Don't keep your savings there! You could keep enough money to write your checks because nobody wants to trot down to the electric company every month and pay their bill in cash

54:17 Maybe a safe in your wall sounds better than a safety deposit box in the bank. Because once your bank goes bankrupt, the doors are going to be closed for at least awhile. How are you going to get into your safety deposit box? probably a good investment right now because they're quite low. But you can't spend your gold coin at the grocery store, they're not going to know what it's worth so you still need some liquidity I actually heard somebody say who was in the know that a good place to keep your excess cash is in a brokerage

54:57 that does not do derivatives. In other words, you wouldn't want to do it at Merrill Lynch because they do do derivatives For example, Scottrade which is where I happen to be. I'm sure there are other brokers but I just happened to know about Scottrade because I called them and said what do you with your overnight – the excess money like people that have sold your stock and haven't bought another stock? You've got cash sitting there so what do you do with that cash? use it in overnight sweeps which is where they lend it overnight to the Wall Street banks and they get a teeny bit of interest. And I said, ìOh dear! Could I opt out of that?î They said yes you may so thereís a place on the website where you can opt out if the overnight sweeps. So basically your moneyís just going to be sitting there but because at least donít gamble with that money themselves

55:52 It should. And they are not too big to fail or anything, I mean they're not going to be under this bail-in system It should be relatively safe there. But of course, overall you probably want to diversify and if you have the wherewithal it would be great to buy a plot of land somewhere where you can have a garden in your own well if you really want to protect but most people don't have the assets for that or their ability to even put in a garden where are you going to put them? I really think we should turn lawns into gardens because a lot of land available but that's what they do in some countries. Their lawns are basically gardens.

56:41 the European Union as they're dealing with I guess some of the decisions made by this Financial Stability Board or some of things that banks might be doing to them because we do have listeners over there and they write me emails. I'm like man, I don't even know what's going on over there! I'm stuck in the American bubble but maybe someone like you can help out people over there what you think they might need to know Well, the European economy is definitely in deflation. I think what's wrong with the whole Euro system is that it's

57:18 Itís like a gold standard. Originally, there was only supposed to be so many Euros in the system and it wasnít supposed to expand. The whole goal was to maintain the stability of the currency by not letting anybody print money and you didnít let the countries borrow from their own central banks. They had to borrow on the open market as if they were borrowing existing money but we now know that what theyíre borrowing is not existing money. The banks create the money that they lend so that when banks make loans, it does expand the money supply. But they're not making loans right now because everybody is in debt because it's the nature of our debt-based system that banks create their money as a loan but they don't create interest. They create principal but not interest.

58:07 There's always more owed back than was put out there. With a mortgage, for example, a 30-year mortgage, there is twice as much owed back on average as what's put out there or a 30 year bond issue for infrastructure created by state let's say. There is twice as much owed back as was put out there. there's no nobody creates the money for the interest and so you what you wind up with this is huge pyramid scheme that ultimately have to collapse the debt a debt overhang it just grows and grows in its finally unrepayable so a number of particularly the southern countries are in that condition right now pretty leading with greece but she could argue that they've been many they were sort of like that

58:53 the guinea pig that Lehman Brothers was and Cyprus was. So those countries are now, they've gone through seven years or so of austerity and the people are just rebelling I mean this is not working for them so in Greece the Syriza party is winning in the polls and there's a presidential election on January 25th. So they're basically a socialist party that is anti-austerity, what they plan to do if they get in is actually print the money to borrow I suppose but allow the government to borrow again from their own central bank, in order to create jobs and infrastructure and things that people have been lacking for a long time. To stimulate their economy and renegotiate the debt they owe to the troika.

59:51 If they win in Spain, the Padelon party which is also a socialist is also leading in the polls so they will probably be right behind with this same sort of thing and it might be that all the southern countries will break away from the Eurozone. There'll be two Eurozones or whatever EU countries. It might be that the whole thing breaks up altogether or it might be that they change The best example is probably in 1933 when all the banks went bankrupt and there was a banking crisis. Roosevelt declared a bank holiday, closed the doors of the banks and when they reopened

1:00:49 They were on a totally different system. He said, ìWell good news!î They no longer have to worry about not having enough gold to pay all the depositors in these bank runs because weíve just gone off the gold standard. Weíre not going to use gold anymore. Weíre going to print money so thereís plenty of money to cover everybody's deposits and you can all rest easy and go home. So they just changed the system and I suspect that's the third alternative and I suspect that might happen in Europe, that they might just change the system. In fact, thatís what they did today with ECB. has now said they're going to print I think $60 billion in quantitative easing and just buy up 60 billion worth of the debt of the Eurozone countries. So that's totally opposed to their prior regulations so they've changed the rules already in doing that

1:01:45 but they might change them further and allow the countries to borrow from their own banks, who knows? Their own central banks. So we're at a time in history when things are changing rapidly and if we're sensible and just change the system, we could fix it. If we're not sensible or that you know, the entrenched old powers prevail, we might wind up in a dystopian 1984 type system so that's what we have to fight against I hear ya, couldn't agree more. So it is all the more important that while people start to see things not working out that people like you get out in front of them and say hey this public bank idea? Not a bad one! This guaranteed income could work! You know these alternative ideas so i really respect what you're doing this has been really awesome very insightful but before we do go would you like to remind the people about your website and where to get your books

1:02:39 Yeah, my website is EllenBrown.com or WebofDead.wordpress.com it goes to the same place and it's got like 300 articles on it that I've written on this since the banking crisis I think and I've done like 800 interviews so there are lots of videos and stuff And my two books are Web of Debt and The Public Bank Solution. They're both available on Amazon, that's the easiest way to get them. And then the Public Banking Institute is at publicbankinginstitute.org and that's where you can find out what to do to take action and also just find out a lot more information about the whole public banking movement

1:03:31 Very cool. Right on, well that's awesome thanks again for being here Ellen this has been awesome I really do feel inspired by how good some of these ideas really could be for people i just hope we get there someday these banks are pretty powerful but you know keep doing what you're due and thanks again take care yourself out there ok thank you and thanks for what you're doing Pop and Lock It People, another great show in the bag. I really enjoyed Ellen and have a lot of respect for her dedication to education and pushing for new ideas. I'm happy to know more about public banking and have a go-to idea for possible solutions amongst all the problems or at least better options than what we have now. And I think that's really interesting about North Dakota! If any listeners are out there...

1:05:43 Some other shows in the conspiracy world are focusing heavily on multiculturalism, and it's getting a lot of people to write me emails to talk about it. And I recognize throughout history the elite have had campaigns to force cultures to clash and they can try that but you choose how you react to it. You can't react differently to fluoride in the water or pollution in the sky but you can choose to see other types of people living around you as a threat or a problem don't do it Someone wrote me saying it isn't fair to see Muslims coming to Europe and changing the culture, but cultures change. It is not hurting you to have a mosque on the corner I have three tattoo shops on my block, a Mormon thing and some Hari Krishna temple

1:06:27 All those buildings are the same to me. I'm just not interested in them, they're not for me! Just like many people who live here don't care about the comic book shop or the dispensary That's cool Let me have my stuff you can have yours And we can still smile when we pass each other on the street And if you have a particular culture in your area that you're proud of and you think is getting whittled away, it's not the Mexicans or the Muslims that are coming in and changing your culture. It's multinational corporations. It's McDonalds and Walmart and Coke and Pepsi that have changed your culture, not Muslims but she didn't get that upset about that because nobody was telling you to so when I see other shows in the alternative space constantly commenting on this multiculturalism thing

1:07:12 I think they're almost doing the work of the elite. They're getting everybody worked up about it when it really isn't an issue But what do I know? I'm a month away from being 30. I know almost nothing, I'm a college dropout but i will say that the damage immigrating Palestinians could do is far less than what big business has already done to your culture walk into a grocery store or gas station and see how many products are made locally or benefit the local community almost none probably exactly none Where is your local grocery store? Where is your local hardware store? Where are the small independent businesses run by the people in your community. They have been taken away, not by anyone but the multinational corporations

1:07:58 When I go to Europe, I wish I didn't see a KFC or a Pizza Hut or a Coke or a Pepsi. I wish I only saw things that were created over in Europe so my vacations felt like I was going somewhere special and new! That's really what I think has been destroying cultures as long as i've been alive and has done way more damage than any immigrants could do And if that's still out there, I could care less what people move into my area. As long as they're not violent! It's just frustrating to see that stuff especially in the conspiracy community because you're supposed to be hip to propaganda and manipulation but your playing right into their script

1:08:35 Pretending that arbitrary borders mean anything, that cultures can't just cohabitate. Like Chinatown can't be right next to Little Italy! I've seen it! Everyone's fine... So many people are worried about Islam right now but as far as i can tell their biggest crimes have been false flags where they've just been used as a boogeyman so I don't know what there is to fear Yeah the Middle East might be a dangerous place-I don't want to live there A lot of Muslims do not want to live there They're trying to move away That's alright.. I get that I do think religions are dumb. Christian, Muslim, Jewish... all of them! Any traditional religion? I don't care. I think you should think for yourself but that's fine. I still have to live with churches and crosses and Jesus loves you bumper stickers But i moved away from Missouri so I'd see less of it

1:09:19 And that's pretty much all you can do too. I don't mind other people trying to elbow their way up to the table that i was lucky enough to be born at, I care about the people at the top that keep everyone from having their own table because that's really all anybody wants it's a round world and common people are not the problem we are the common people! I also don't buy this propaganda that Islam is this fast rapidly growing religion that's going to take over the world I highly doubt that in the internet age, the fastest growing religion isn't atheism or some type of personal spirituality. I'm not really worried about any religion gain a foothold in a civilized country anymore it's over with

1:10:03 And that's about all I got to say. I'm getting out of here! I gotta declare this meeting of the Midnight Society closed... Take em home, Shatner She came from Greece she had a thirst for knowledge she studied sculpture at St Martin's College That's where I caught her eye. She told me that her dad was loaded and I said in that case I'll have a rum and coca-cola. She said fine and in 30 seconds time she said I want to live like common people. I want to do whatever common people do, I want to sleep with common people. I wanna sleep with common people like you! Well what else could i do? I said...I'll see what I can do! I took her to a supermarket. I don't know why but I had started somewhere so it started there

1:11:06 I said, pretend you've got no money. She just laughed and said oh you're so funny! I said yeah? Well i can't see anyone else smiling in here Are you sure?! You want to live like common people? You wanna SEE whatever common people see? You wanna sleep with common people?? You wanna sleep with common people like me??? But she... didn't understand. She just smiled and held my hand Read supplies above a shop Cut your hair and get a job Smug some slags and play some fool Pretend you never went to school But still, you'll never get it right When you're lying in bed at night Watching roaches climb the wall If you called your daddy he could stop it all

1:11:59 You'll never live like common people. You'll never do whatever common people do, you'll never fail like common people. You'll never watch your life slide out of view and dance and drink and screw because there's nothing else to do! Sing along with the common people! Sing along and it might just get you through. Laugh along even though they're laughing at you, in the stoop that you do cause' you think that poor is cool Like a dog lying in a corner They'll bite you and never warn you Look out

1:13:05 They'll tear your insides out because everybody hates a tourist. Everybody hates the tourists, especially one who thinks it's all such a lie! Yeah and the chip-stained grease will come out my butt! You will never understand how it feels to live your life with no meaning or control and with nowhere left to go. You'll remain as if they exist, and they burn so bright while you can only wonder why... Rent a flat, buy the shop Cut your hair and get a job Smoke some fags and play some pool Pretend you never went to school But still you'll never get it right Cause when you've laid in bed at night Watching roaches climb the wall If you called your dad he could stop it all

1:14:04 You'll never live like common people. You'll never do what common people do. You will fail like common people! You'll never watch your life slide out of view, and dance and drink and screw because there's nothing else to do!