oh i'm sorry been 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 the one we doing to help the thousands of americans who bravely serve this country but now find themselves broke and broken well as the big picture rumbled 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 called evaded while living abroad for eleven years in kenya during squat amal and nicaragua she resumed her legal career when she was asked to join the legal team of a popular tijuana healer with an innovative cancer therapy was being targeted by the pharmaceutical industry in the one nine hundred ninety s. that experience led to her book forbidding forbidding medicine which traces the suppression of natural health treatments to the same corrupting influences that have captured our money system ellen brown has written eleven books including the best selling nature's pharmacy she coauthored with dr lynne walker her latest book

is a web of debt it's also the title of her website web of debt 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 set themselves and how we the people can get that power back my pleasure welcome to our studios in los angeles ellen welcome. 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 does exists exacted or extracted or both at every stage of production suppliers need to take out loans to pay for labor and materials before they even have a product to sell for government projects can be found that the average cost of interest is fifty percent it looks like

a vat tax on steroids and why doesn't anybody in america know about. it is shocking well and so you mentioned i was president the public brain institute there are are what we're pushing for is that if this if the big three publicly owned you could say that forty percent and other words you would get it back you 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 then she found that fifty percent of government projects are interests so if the government owned a bank then it could find prices many projects for the same price or it could cut the cost of all its projects in half which means it could cut taxes or it could do a lot more than it thinks it's doing right now put 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. was a zachary taylor which which one of the presidents ran on the shutting down the

federal bank and it was in the you know the names and it ended jackson thank you very much and i mixed into a costly and you know there was a lot of sentiment against a national bank and then we went to you know how does this fit into the history of banking 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 too why is that something that you know people have been why are they now calling for why of americans traditionally opposed it. well i think largely because they don't understand the concept that we didn't 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 and they made it well they printed out little paper receipts that they called paper scrip you know so they issued the

money the government issued the money so they would lend it to farmers at five percent interest it was totally sustainable because. the money would then they would spend like five like you maybe issue one hundred dollars 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 government bank was the principal source of in from the only tax they paid was excise tax on liquor and then they and they had no government and prices tonight and flex it was a totally sustainable system benjamin franklin thought it was great he wrote about it. but we never did that again until well links and of course printed as on money during the civil war but then he was assassinated and green that program ended and

then the dedication lee states which would form state owned banks but they were only one that survived was the bank of north dakota which was founded in one nine hundred nineteen and it's north. brilliantly well compared to the other states it's the only state that escaped the credit crisis totally they've had a budget surplus every year since the credit crisis i mean they've had their biggest budget surpluses ever. they have the lowest unemployment rate in a country the lowest authority on loans. so. melon because because in north dakota basically the the prophet i mean 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 associate with the finance sector that that enormous sucking out of profits in north dakota

is actually whatever profit is made where the bank goes right back into the state treasuries that have that right and so in that state and a treasury. that the state itself has a credit line with the bank so they can get cheap credit you know the banks there while she banks can get money from each other for our miss that big zero point two five percent is the fed funds rate our they get it from the fed. but state local governments are paying five percent or more for for their for borrowing so if you had your own bank you could borrow for free right you know no it wasn't a concern but if you had your own bank and you could borrow for free that you just like go nuts spending the money or the banking the system of banking would become politicized. well yeah that that was the reason in one thousand and thirty five that. the federal reserve was no longer allowed to just

walk right over to congress and monetize 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. on on the open market which means they have to buy from these middleman baik so here we are paying a cut to the middle name banks and worse and 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 happened to the other banks 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 you know the fed creates money or money is created is brought into creation when when debt is korean when loans are created that's when money when the money supply increases and in the regulates the money supply by buying. by buying the government bonds.

it up or correct me if at any point here if i have this wrong but what most people don't get is that they can only buy those bonds you can't buy them from the government which issues them you have to buy them through like bank of america which skims a couple percent off the top and so in order you know for our own system theoretically . 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 they've 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 cost push inflation largely due to oil which was which was artificially inflated but around the world after that center 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 this approved by the bank for international settlements which is now the the super regulator for a day for the banks and the way this is supposed lines but if you don't follow the guidelines and the rating agencies all downgrade your debt and we can see in europe quite a disastrous effect that happens everybody is terrified of the rating agencies which are private insurers which are all support and therefore they do whatever the bank settlements says they follow the rules the ones that don't follow the rules here like libya we saw what happened there over iraq etc so if 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. now or they don't have reserves in the sense that people think in other words they don't have gold or

anything real i mean they create the reserve so in that sense that you know the reason 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 banks ah get a dividend they get paid six percent annually for on their investment so it actually is a money making private venture in that sense and it's that better is their branches that print the dollars if you look at your dollar bill you can tell which branch it came from so our money is made by a private. entity that has this petition of government because the president appoints is a half or all of the of the federal directors so the to the i think they're yeah appointed by the president approved by congress by congress but then be our

own to buy the regional banks and the regional banks directors are selected by the local banks that oh now do i have that right. again i was there the at the at the at the fed level the those directors are selected by the president their nominee to the president but they're answerable to their owners which are the 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 a lot of those chords have big bank well 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 for j.p. morgan made out like a bandit for example which with the buyout of bear stearns or you know on the destruction of bear stearns they they got. so you would think that is. 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 kucinich has proposed legislation to basically have the treasury department by the federal reserve from the banks or just take 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 and i mean you could say they're countries that sort of started out that way like china. or for the united states and i mean it yeah they're certainly countries that have borrowed from their central bank directly and then the central bank just printed the money like canada but but it will they keep the books in such a way that it looks like they owe the money back even though they continue to increase the debt and where we've been at ourselves where the debt has gone up or not but i can't think of any country except obviously colonial america that's what we did in colonial america it was the provincial government just created the money

and that was the money supply and this is what north dakota does of sulfur and now . but actually they don't. they don't print money but it's the same effect 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 huge capital base that the state does by law all the revenues go into the bank of america 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 that forty percent or that fifty percent and use it locally for our own purposes so what the banker what it does is very like the bank accounts again it did even though it doesn't have the power to print its own money it's still a sustainable system because it all goes back to the people through their you know

tax money and arguably every every time they generate loans they're actually increasing the money supply. true but when the loan gets paid off then it on a contract then we contract and then deposit and say stupid sustainable ok yeah that's that's a catch a private base you know some people argue that this whole debt irish theory is not true the idea that banks on the create principle and they don't create the interest and therefore it's unsustainable 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 do that a private bank that's not that's why we have a one percent and ninety nine percent that money grows exponentially and the one percent or the ninety nine percent 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 that more than they put out so it's the next exponential parasitic growth on top of this arithmetic normal not sustainable ok so i want to get at how 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 debt jubilee we're talking with ellen brown we'll be back with more of our conversations with great minds with ellen brought in just about. what drives the world the fear mongering used by politicians who makes decisions to break through get through if you've made who can you trust no one who is you view with the lobel mission ridge see where we had

a state controlled capitalism and score sessions when nobody dares to ask we do our tea question more. welcome back to 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 webbed at 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 and 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 sell and apparently more than total credit card debt what what would a student loan jubilee a debt jubilee be light. by fully 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 that we 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 that 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 feel a lot of good because the money didn't get into the local economy if you build up the students just cut they're just left them on scot free where you can argue the morality of it and of course there is probably much more maybe fair ways to do it to just buy up 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 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 malls. and that there are two things that are missing in the economy one is. businesses can't get credit from their local banks and that's something that a state on base would help with but 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 markets that will not be inflationary it will happen is g.d.p. will go up along with the money supply prices stay stable you really should do instead of all this i stared they were looking at me yeah. i don't know of any country that's cut its way to profitability or or prosperity over history of the world you mentioned the student loans are being transferred and 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 when you see 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 did right 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 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 student students are being probably 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. it 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 or 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 ever reach that income they don't have to repay that's what they do and i stray in new zealand and it works out fine and in many countries of course they're free tuition that should have been free in the

first place as as it is 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 i mean they did the kind of am you know 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 frank and that . audit was done by the c.e.o. of the fed revealed 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 by sixteen trillion that's a mind boggling amount of money i mean congress was was squabbling in fighting over eight hundred billion dollars seven hundred 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 the homeowners with bad mortgages had simply been given to homeowners to say ok we're going to refire 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 pings 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 the end 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 it led where where it's leading they should do that 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 fraud but as long as you're going to sustain that fried. if you don't want the thing to fall apart you really need a big central bank that's going to a. be the lender of last resort and b. do 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 had three trillion dollars less in a money supply now than we had in two thousand and eight so the fed really should be e.c.b. should do this they should step out and get some more money out there to the europeans in nature and i resist them where you're always taking back more in. principal and interest then 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 nineteenth century and the gold standard you've written about how if the student health warning 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 ago about that correctly yeah. you

could solve it i mean you're going to run into the two thirds or other constitutional issues etc but let's say that ideally you are in a position to fix and set up a system that actually works you could solve it that way because you could generate california could has on the exact same model as the big tonight and north dakota it could have one hundred fifty billion dollars in credit power it could make that much in months that's how much the bacon i try to has they have four thousand dollars per capita in your profits and they have about the same in the 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 fines you would 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. understand that it's seven billion be enough to service the debt i have another one 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 the debt itself california has it has a debt of something like one hundred fifty billion they don't compound the budget they only count whether you pay the interest. so you could use that entered that interest income to service a lot more productivity for the state and it seems like if every state did this just like you know with health care if each state were to do it for a modest or get it well that's a whole new discussion and ellen brown. is the do you do you see any states we have just one minute a lot do you see any states moving in the direction of doing what north 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 to both houses of the of the legislature but the governor failed to sign it so we're planning to bring it bill again but there are fourteen states now that have legislation of one form or another it'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 what it would be for the bottom line is that you know that 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 states and who has to do that yeah incredible ellen brown thank you so much for being here with us tonight and thanks for 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.