i'm sorry welcome to the big picture. hello i'm starving in washington d.c. and here's what's coming up tonight on the big picture you've heard of the bill of rights but do americans need an economic bill of rights our conversations with great minds guest thinks so find out why adjustable and the country paused to honor our veterans today what are we doing to help the thousands of americans who bravely serve this country but now find themselves broke and broken as the big picture rumble later in the show and incidents daily take going local isn't just for your groceries anymore it might just be the solution for current economic crisis.

for tonight's conversations of great minds i'm joined by ellen brown ellen brown is an attorney and the president of the public banking institute much of her career has focused on the developing world and its problems and interest that she cultivated while living abroad for eleven years in kenya douras watermelon nicaragua she resumed her legal career when she was asked to join the legal team of a popular t.-o. on a healer with an innovative cancer therapy who was being targeted by the pharmaceutical industry in the one nine hundred ninety s. that experience led to her book forbidden forbidden medicine which traces the suppression of natural health treatments to the same corrupting influences in the capture of our money system ellen brown has written a love and books including the best selling nature's pharmacy she coauthored the dock. lynn walker her latest book is web of debt it's also the title of her website

webbed at dot com where she focuses on an analysis of the federal reserve and the money trust the book explains how what she refers to as a private cartel is usurp the power to create money from the people that's themselves and how we the people can get that power back it's my pleasure welcome to our studios in los angeles ellen welcome. and thank them pam thanks for joining us according to margaret kennedy a german researcher who has studied this issue extensively and you cite interest now composes forty percent of the cost of everything we buy here in the united states i don't see in the sales slips but interest as it is exists exacted or extract or both at every stage of production suppliers need to take out loans to pay for labor and materials to further been our product as for government projects kennedy found that the average cost of interest is fifty percent is that

a vat tax on steroids and why doesn't anybody in america knowable. it is shocking well and so you mentioned i was president of the public brain institute there are are what we're pushing for is that if this if it big were publicly owned you could save that for eighty percent and other words you would get it back well the taxpayers would get it back in the form of it would be money that would go to the government that the government could bench spend she found that fifty percent of government projects are interests so if the government owned the bank then it could find prices many projects for the same price or it could cut across the violence project somehow which means it could cut taxes or it could do a lot more than it thinks it's doing right now back at the founding of our country one of the epic battles between jefferson and madison was whether or not we should have a national bank you had. it was a zachary taylor which which one of the president's ran on the on shutting down the

federal bank and it was a new you know the names and energex and thank you very much and i mean the two of consul and you know there was a lot of sentiment against a national bank and then we went. to hot how does this fit into the history of banking we're how did we end up with with this with the fed and why is what you're suggesting which is done in one state right now and i'd like you to tell us about that why is that something that you know people have been why are they not calling for why of americans traditionally opposed it. well i think largely because they don't understand the concept but we did have that probably the best banking model we have ever had was the bank of pennsylvania in benjamin franklin's times and that was publicly they made well they printed out little paper receipts that they called paper scrip you know so they they issued the money the government issued money so they would lend it to farmers that five percent interest

it was totally sustainable because. that money would then they would spend like five like you maybe issue one hundred dollars spend five dollars on government projects and then you'd have one hundred five dollars out there which would all come back as principal and interest and then they could lend one hundred dollars spend five dollars they could do that over and over without having to increase the money supply was totally sustainable there was and they paid no taxes during the time that that system was in place because the governor of the bank was the principal source of income the only tax they paid was excise tax on liquor and then they and they had no government and price did not inflate so as a totally sustainable system benjamin franklin thought it was great he wrote about it. but we never did that again until well lincoln of course printed his own money during the civil war but then he was assassinated and greenbacks program ended and then

a dedication only states which would form state owned banks but they are the only one that survived was the banks of north dakota which was founded in one nine hundred nineteen and it's just you know brilliantly well compared to the other states it's the only state that escaped the credit crisis totally they had a budget surplus every year since the credit crisis i mean they've had their biggest budget surpluses ever. they had the lowest unemployment rate in a country the lowest authority on loans. and so. because because in north dakota basically the the profit i mean in banking the banks accounted for thirty four percent of corporate profits last year you know. thirty percent of our total in dust industrial activity appears to be associated with finance sector the bat enormous sucking out of profits in north dakota is

actually whatever profit is made by the bank goes right back into the state treasuries that do i have that right exactly and so in that state and a treasury so how devastated self as a credit line with the bank so they can get cheap credit you know the banks the wall street banks can get money from each other for our money and i think zero point two five percent is the fed funds rate or they can get it from the fed. but state in europe and local governments are paying five percent or more for their for borrowing so if you had your own bank you could borrow for free right yeah you know it wasn't a concern but if you had your own bank and you could borrow for free that you'd just like go not spending the money or that the that the banking the system of banking would become politicized. and well yeah that that was the reason in one nine hundred thirty five that. the federal reserve was no longer allowed to just walk right over to congress and the budget like they had been doing

before that so the argument was that that would make it too easy for congress to spend but what happened was then now the federal reserve has to buy bonds on the open market which means they have to buy it from these middleman bake so here we are paying a cut to the middleman banks and worse than that the banks don't necessarily use the money for you know it doesn't necessarily get back to the government like it was intended for an example we now have one point six trillion in excess reserves sitting on the books of the banks and most of them are foreign banks because they happen to outbid the other breaks at the auction i think this is one of the things that a lot of americans don't realize you know people talk about well that you know the fed creates money or money is created is brought into creation when when debt is created when loans are created that's when money when the money supply increases and and the regulates the money supply by. buying government

bonds. iraq or correct me if it at any point here if i have this wrong but what most people don't get is that they can only buy those bonds they can't buy them from the government which issues them they have to buy them through like bank of america which skims a couple percent off the top and so in order for our own system theoretically to. to be to be participating in regulating our money supply it's got to pay some vig to the to the for profit banks. exactly and it's just that they gave last control that way the bank of canada used to fund the government directly by direct loans so it's basically free and then in the seventy's there was this whole push it was there was this period of stagflation when it was blamed on the government supposedly printing money but they weren't and that wasn't the real reason it was cross-question place and largely due to oil which was which was artificially inflated but around the world after that century of the central banks were not

allowed to live in lend directly to their own governments even though they had the power to do it it was just disapproved by the bank for international settlements which is now the goober regulator for a day before the banks and the way they this is supposedly tried lines but if you don't follow the guidelines in the rating agencies downgrade your dad and we can see in europe what a disastrous effect back and happens everybody is terrified of the rating agencies which are private page or if you're also pro therefore they do whatever the national settlement says they follow the rules the ones that don't follow the rules are like libya we saw what happened there or iraq etc so if you know first of all the federal reserve just very quickly the federal reserve is not federal it has no reserves right who owns the voters are true now they don't have reserves in the sense that people think in other words that are not gold or anything real i mean they create the reserve so in that sense they do the reasons

they are the manufacturer of reserves they're the lender of last resort and they're not federal in the sense that they're it's there it's composed of twelve branches all of which are own one hundred percent by by the banks in their district that are member banks. and that those banks ah get a dividend they get paid six percent annually for on their investment so it actually is money making private venture in that sense and it's that federer is their branches that print their dollars if you look at your dollar bill you can find out which branch it came from so our money is made by a private. entity that has this between a government because the president appoints is a half or all of the of the federal directors so the so the i think they're pointed by the president approved by congress by congress but then they are own to

by the regional banks and the regional banks directors are selected by the local banks that own them to have their. eyes again i was there the at the at the third level the those directors are selected by the president their nominee of the president but they're answerable to their owners which are the real as i board of governors the other better in order to go but then you have your branches which are all have their own board right and i lot of those boards have big bank like. they had of j.p. morgan jamie diamond is on the board of the new york federal reserve which is the largest federal reserve. j.p. morgan made out like a bandit for example which with the buyout of bear stearns or you know destruction of bear stearns they got it so you would think that is that a blatant current conflict of interest but the trouble is there is so powerful that

nobody has the clout to do anything about it so dennis percentage has proposed legislation to basically have the treasury department why the federal reserve from the banks or just taking nationalize it. has that been done by other countries in the past is that something that would be a good idea. i don't think it has been done i mean you can say there are countries that sort of started out that way like china. or for the united states and i mean it yeah there's certainly countries that have borrowed from their central bank directly and then the central bank to spread in the mining like canada but but it they keep the books in such a way that it looks like they owe the money back even though they continue to increase that i mean we're we've done that ourselves for that that has run up or not but i can't think of any country except obviously colonial america that's what we did in colonial america with the provincial governments just printed the money

and that was the money supply and this is what north dakota does of soft right now . but actually they don't. they don't print money but it's the same fact in the sense that banks actually create money that's what people don't realize is that you take here if you had that you have a huge revenue base and a huge capital base that the state has by law all the revenues go into the bank on earth then the bank can leverage that money into credit just like any any bank does all banks create credit that's why we want to own our own banks because we want to get that power back from the banks we want to get back their forty percent or their fifty percent and use it locally for own purposes so what the bank or north dakota does is very like what the bank of pennsylvania did even though it doesn't have the power to print some money still a sustainable system because it all goes back to the people through their you know

tax money and arguably every day every time they generate loans they're actually increasing the money supply. true but when the loan gets paid off then it on its contract then and we contract and then the states this thing are ok for you here that's the that's the catch the private patient some people argue that this whole debt iris theory is not true the idea that banks only create the principal and they don't create the interest and therefore it's unsustainable as some people say well being but banks bankers you know will spend the interest into the economy like anybody else and therefore it's out there but that's not true a public bank does that a private bank that's not that's why we have a one percent and ninety nine percent that think money grows exponentially and the one percent or the ninety nine spurs since money grows arithmetically so bankers do not need to spend into the economy they what they do with their money and wealthy people in general the one percent reinvest their money so they don't just you know

give you a dollar for a loaf of bread they give you a dollar and they want the dollar back. with ten percent or something on top of that right so they're always taking back more than they put out so it's a net exponential parasitic growth on top of this arithmetic normal sustainable ok so i want to get out of that system is just getting bigger and bigger and i want to get it and i want to get into what what we could do if we were to change this and how we might go about this and the whole concept of a dead jubilee we're talking with ellen brown will be back with more of our conversations with great minds with helen brown in just about. what drives the world the fear mongering used by politicians who makes decisions to break through get through to people made who can you trust no one who is you know view with a global reach see where we had a state controlled capitalism is called sasha's when nobody dares to

ask we do our t. question more. five. three. five. while the magic conversations with great minds tonight we're speaking with author and attorney ellen brown in los angeles web of debt is the title of her book web of debt dot com her website. ellen the the occupy wall street protesters have been

talking about and this is this is you know been a very hot topic is student loan forgiveness work student debt is about to hit one trillion dollars here in the united states something that's never been seen here in any other country in the history of the world as far as anybody can tell and apparently more than total credit card debt what what would a student loan jubilee a debt jubilee be like. philly for example as a student loan jubilee working group what would be debt forgiveness and and would that help or hurt our economy. well there variety of ways you could do it you wouldn't have to forgive the whole debt but you could you could arguably forgive that entire trillion dollar debt and it would actually stimulate the economy only the federal reserve would have the power to do that because they're the only entity that has the money we just saw that they came up with sixteen trillion to bail out the banks i mean they can come up with whatever they want to come up with and the

fed has said recently they're looking at quantitative easing three or four depending on whether you count operation twist and they've said that they're going to do asset backed securities which would be include bundles of student loans that's what they do with the student debt they bundle it up and they sell it off as securities they did one point three trillion in quantitative easing one which was to bail out the banks but it didn't get a lot of pay because the money didn't get into the local economy if you bailed out the students and just cut their just let them off scot free where even you can argue the morality of it and of course they're probably much more maybe fair ways to do it just the debt and forgive the interest or something but you could just give them that money back and there is no group that we shop for more than the young people i mean these are the people that we get out into the stores they're the people that buy the new homes they need to furnish their new homes they need

the cars they love the electronics they love to hang out in the models. and that there are two things that are missing in the economy one is. that businesses can't get credit for their local banks and that's something that a state on base would help with that's a problem that north dakota does not have and too they don't have customers and there it's there's a lack of demand and demand means that consumers do not have money in their pocket so you put some money in the pockets of the consumers they will go out and buy and that means the companies will go out and hire more people to produce more goods it will not be inflationary it will happen is g.d.p. will go up along with the money supply crisis. you really should do instead of all this us they were like yeah. i don't know of any country that's got its way to profitability or prosperity ever in the history of the world you mentioned the student loans are being truncheon bundled much like you didn't say it but i'm

assuming much like mortgages were the is is is the bubble being reinflated now with student loans. you could say that i mean when i went to college i went to u.c.l.a. for furthur i went to berkeley for free in the sixty's and went to u.c.l.a. law school in the seventy's for six hundred dollars a year now it's thirty five thousand dollars a year for an in-state student to go to law school i think i wanted incredible markup and yeah and students cannot pay that i mean today they can't get jobs when they get out of school the idea was you would go to school and get a better job and you would quickly pay off your loans for first of all that's one hundred thousand dollars just for tuition and not counting you know residence and stuff so you get out of school if you can't get a job obviously you have to default you're not allowed to file bankruptcy students students are being probed we discriminated against in this in these onerous

conditions they're imposing on the loans and they do that because students have no collateral you know they would just as soon take your house but students don't have a house so instead they squeeze them for every last ounce of dollars that they can get out of them but yeah so so when that collapses we're going to have another situation like the subprime mortgage collapse and another credit crisis unless we do something about it so it would be a logical thing for the fed to do to at least what they could do is buy up these bundled loans and we refinance them forgive the interest totally make them interest free loans and then. don't require repayment until students have a certain amount of income is going to don't ever reach that income they don't have to repay that's what they do and i stay in new zealand and it works out fine and in many countries of course you're free to wish it should have been free in the first

as as it is in most most of the developed world but isn't this isn't the notion of the government taking on the. extended over long periods of time and let it be repeated a very low interest rate that's what f.d.r. did with with housing just one hundred thirty years of not. yeah yeah and they were totally well emulated economy with something like seven percent growth during that period yeah and it showed a profit for the federal government i'm curious you mentioned the audit of the fed this is something that senator bernie sanders got inserted into dodd frank which is one of the reasons i think the conservatives are so hysterical about dodd frank and that audit was done by the c.e.o. of the fed revealed that in two thousand and eight in that one year the fed basically wrote checks for sixteen trillion dollars to u.s. banks to large u.s. corporations to some very very wealthy individuals in the united states to foreign banks we're talking with student loans here about one trillion and and and that was

sixteen trillion to deal with the housing crisis first of all guy sixteen trillion that's a mind boggling amount of money i mean congress was so was wobbling in fighting over eight hundred billion dollars seven hundred and change less than one trillion it with tarp why the sixteen trillion and and you know what consequence did that have and and what if that money instead of being given to the banks toure's had been used to simply as f.d.r. did with you know homeowners with bad mortgages had simply been given the homeowners to say ok we're going to refire your home. yeah well that's what they should have done but actually that sixteen trillion isn't as shocking as it sounds i mean they did not give it to the banks they all they did was give them overnight loans in other words they lent it and they got it back and before that the banks could get cheap credit from each other and suddenly there was this credit freeze so what that what the federal reserve did as lender of last resort which is actually

what they should have done and what their mandate was to do was to backstop they stepped up and rolled over the debt and instead of that it was the money market that froze you know in and that is where there is this total collapse. of the market and you can see that the e.c.b. is refusing to do that in europe and you can see where where where where it's leading they should do that as this big central bank should be the lender of last resort as long as we have a debt based system like we have you got to have either somebody backstopping the whole thing i mean it's all kind of based on a friday but it's like if you're going to sustain that fried. and you don't want the thing to fall apart you really need a big central bank that's going to pay. be the lender of last resort and be some quantitative easing when the money supply shrinks says it did. the shadow banking system right now is three trillion dollars short according to the fed's figures in

other words we have three trillion dollars less in a money supply now than we had in two thousand and eight so the fed really should the e.c.b. should do this they should step up and get some more money out there to the europeans and nature and i was just i'm where you're always taking back more in. principle and interest than you put out there that you have to allow that system to expand or you're going to have periodic depressions just like they had in the one thousand century and the gold standard now you've written about how if the student california were to do with the state of north dakota has been doing since the nineteen teens. create a state bank and then take all the banks all the state's business all the state's borrowing and bonds everything else and run it through its own banks so any profit from that goes into the states coffers to be used for other things to be used for the state's business. that would solve california's fiscal problem do i recall that article that you wrote some months who are correctly yeah. you could

solve it i mean you're going to run into the two thirds or all the constitutional issues etc but let's say that ideally you are in a position to pick to set up a system that actually works you could solve it that way because you could generate california it could has on the exact same model as a big and north dakota it could have one hundred fifty billion dollars in credit power it could make that much in loans that's how much the bank north dakota has they have four thousand dollars per capita in deposits and they have about the same in it in loans so california has thirty seven million people times four thousand comes out to one hundred forty eight billion so they could make that much in loans i mean even if you did the simple thing and and just but you know as well fines you can make five percent interest on that so you would get something like seven billion dollars

a year well that's seven billion would be enough to service the debt of. i understand that it's going to be enough to service the debt. i know there are hundred fifty billion so you could you know they don't in their budget they only count the interest they don't they don't worry about that debt itself california has it has a debt of something like one hundred fifty billion they don't camp in the budget they only count whether you pay the interest. so you could use that interest that interest income to service a lot more productivity for the state and it seems like if every state did was just like you know with health care for each state we're going to would promote is talking about well that's a whole new discussion and ellen brown. is the do you do you see any states we have just one minute do you see any states moving in the direction of doing what north dakota has been doing since since one thousand nine hundred with the growth of banking but california has

a bill that made it through both houses it made it through both houses that of the legislature but their governor failed to sign it so we're planning to bring a bill again but there are fourteen states now that have legislation of one form or another that's been initiated initiated for a state owned bank and there's a lot of interest in it and i think people are coming more to understand the concept that's the first hurdle is that people say i don't trust government what do we need another bank for. and you have to put the bottom line is that you know there is there is profit in banking and that profit is either going to go to the to the stockholders of bank of america or it's going to go to the state and to stand already knew that yeah incredible ellen brown thank you so much for being here with us tonight and thanks to watch this conversation again as well as other conversations with great minds go to our web site of conversations of great minds dot com are you.